Chapter 7: PERSON AND PROPERTY
Mind, Body and Property - Extending the Protection of Law - Liberty
and Enforcement Services
Mind, Body and Property
There is a naturally definable Personal Area which inherently
"belongs" to each individual: the mind, body and products of the
individual's labour, that which is directly associated with, or
attributable to the individual.
Legislation applicable in this Personal Area deals with what is already
by creation and by definition the individual's property. The Principle
of Liberty requires protection without intrusion.
This would be reflected first and foremost in the simple requirement
that Government should "prevent men from injuring one another".
Many may feel that Government should do much more; but few would dispute
the proposition that personal protection must form the essential basis of
Law. If a nation's good citizens cannot walk peacefully in the streets
without fear of physical violence, or if they are not safe in their homes,
then surely their Government is failing in its most fundamental duty and
purpose, whether that failure be an insufficiency in Law or in the
enforcement of it.
Security of body and mind from intrusion by others naturally includes
legislation and protection against murder or physical injury. We must also
include the more subtle forms of intrusion such as excessive noise, light
trespass, and air pollution (which also affects the environment as a
separate issue). Protection from excessive or unreasonable noise is now
recognized as an important area of Personal Liberty, and light trespass
already enjoys legal recognition, although this latter fact is not widely
While smoking in private is a matter for personal discretion and is no
concern of government, it is now widely recognized that smoking in shared
and public places creates a form of air pollution which others may be
allergic to or find offensive, and from which they should expect
protection in law and through local bylaws.
An example of a new development in personal privacy protection can be
seen in the present need for clear regulation applicable to computer Data
Bases containing information of a personal nature.
The laws of Personal Liberty must also protect property: the direct
manifestation of the individual's labour, such as ideas and services, or
the equivalent in goods, services or money which the individual has
obtained in legal and fair exchange for his products or labour.
While the protection of person and property is currently recognized and
thus a non-contentious issue, complications in the Personal Area are
nonetheless potentially numerous. Freedom of speech, for example, is
highly respected in the United States; its importance lies particularly in
the protection of citizens from Government attempts to stifle opposition,
and in the benefits of ensuring the free flow and development of ideas.
But should the Law permit published lies and defamation of character?
Clearly not, as there is injury here.
Newspaper readers have a right to expect the truth insofar as it is
reasonably obtainable; and individual citizens have a right to privacy,
and to protection from publication of lies and character defamation.
Freedom of speech, like freedom of action in general, cannot be absolute.
What is important, as in all cases of interpretation of the
Principle of Liberty, is that each and every actual, potential or
suspected injury be fully explored, then minimized or eliminated. The
existence of injury places a clear obligation upon Legislators to identify
and prevent it. But the existence of injury also exercises restraint over
Legislators, who cannot act except in the protection of liberty from
clear, definable and explicit injury.
The Principle of Liberty is fully and accurately reflected, and
liberty is maximized, when the citizen is fully protected from personal
harm or injury or intrusion, theft or deprivation of property. This is
represented by a degree of Intervention of 50%, no less, and no more. If
this protective force is exerted by Law and Enforcement in all cases of
infringement of Personal Liberty then the Law is applying a precise degree
of 50% Intervention.
If the Law then increases its degree of Intervention beyond 50%, to a
nominal 51% or further, it is now exerting not a protective or defensive
force, but an aggressive, intrusive force. At this point we start to lose
connection with the Principle of Liberty, as the Law itself begins
to create infringement of citizens' Liberties.
One very simple test of Government force or intervention, by which we
can define whether a particular Law is defensive or intrusive, is to ask
whether or not the Law concerned is in defence of one identifiable Liberty
against a clearly definable infringement by another. If it is, then it is
protective. If it is not, then that Law is intrusive and exceeds 50%
Intervention. Under a Policy of 50% Intervention there can be no Law and
no crime without an Injury, without a clear infringement of the Liberty of
one citizen by another.
If Government issues any Law, order or directive which is not clearly
in defence of an identifiable Liberty, then Government is exercising not
50%, but some higher degree of Intervention.
It might easily be assumed that Government, especially in a "free" and
democratic country, rarely if ever strays into oppression. The assumption
would regrettably be quite erroneous. A high degree of Intervention in the
Personal Area is quite common and increasing. Governments slip into the
beginnings of oppression in two ways: by legislating "for the citizen's
own good", and by claiming through the process of taxation-as-of-right an
ever-increasing proportion of the citizen's earnings which are then
disbursed at Government's absolute discretion.
Laws which intrude into personal, private lives "for our own good"
represent the first step into 51% Intervention and beyond. The first step
is the most significant; once that is taken by Government, and citizens
have accepted with their compliance, the safe confines of the Principle
of Liberty have been breached, and further steps will inevitably
Consider, for example, the Law requiring minimum-wear standards on the
tyres of motor vehicles, and laws requiring seatbelt use.
Worn tyres can cause an accident which may result in the injury of
others; legislation laying down minimum specifications for tyre treads
would therefore be in accordance with 50% Government Intervention. But a
Law requiring the use of seat-belts is for the individual's personal
safety only; failure to use a seat-belt can in no way infringe the Liberty
of others. Such legislation thus represents an excess of 50% Intervention.
It is often argued in countries with State-operated Health Services
that accidents caused by lack of seatbelt use are an imposition on the
National Health Service and thus on the community; this argument overlooks
the fact that enforced contribution to a monopoly State-run Health Service
is itself a gross infringement of individual Liberty.
Another motive behind this type of "personal welfare" legislation is
the presumption that Government has the right, or even the obligation, to
impose directives on conduct relating exclusively to the individual's
private welfare; this assumes, dangerously, Government superiority. "We
think it's good for you, we know best, therefore you must be required to
do it by law".
Should we accept that others know better? Most certainly one should
always be open to professional advice, and most certainly it is wise
always to consider and practise prudent personal behaviour.
But should we accept compulsory direction by Government of private
lives and conduct, direction which has no bearing upon political liberty?
If we do so, then we are humoring Government dangerously; we are
acquiescing to the myth of Government superiority; and we are encouraging
other similar intrusions into private life and conduct.
Today it is seatbelts and mass-medication through the water supply
(fluoridation); tomorrow no doubt, as a simple logical extension of the
same principle, it will be mass cold baths and early morning exercises
under the auspices of the Ministry of Public Wellbeing. People might be
healthier in body, but the health of political Liberty would take a severe
turn for the worst.
As we debate the pros and cons of various aspects of wise or unwise
private personal conduct we frequently omit the most important question:
should Government intervene to enforce the final decision?
Having omitted to ask this question we all too frequently assume that
if some aspect of private conduct is sensible and safe for the individual,
Government enforcement of it is automatically appropriate and desirable.
But we should realize that in so doing we are taking the first steps on
the road to oppression.
No persons either individually or through Government, should impose
their will, their way of life, their judgements or their brand of wisdom
on the private life of others no matter how correct they might think their
own way of life to be and how wrong they think that of others. the
Principle of Liberty and the Laws which reflect it respect the
individual's right to do things which might be considered foolish or
unwise, provided they do not harm others.
It is important that we should remain ever watchful in regard to the
expansionary activities and influences of Government in order to ensure
that Intervention never exceeds the precise degree of 50%. When citizens
infringe the Liberties of one another they fortunately have limited scope
to do so, and those harmed can find remedy in law. But when the law slides
into the path of oppression, remedy is more difficult to find, the effects
are much more far-reaching, and the trend is difficult to halt or reverse.
Just as Government under the Principle of Liberty may not
intrude into the individual's personal life except to legislate for the
protection of others, so also would Government no longer be permitted
access to the individual's earnings, helping itself without limit to
however much it chooses.
Government infringement of Personal Liberty in the demands which it
makes upon our earnings is an issue increasingly claiming our attention;
it is not just a matter of quantity, but fundamentally more important is
the assumption on which such claims are based.
Government takes taxes as of right, with no obligation to offer
anything in return or to justify specific expenditures, and without any
operational disciplines on the productive use of such taxes.
Citizens traditionally expect any of three duties from Government: law,
income transfer, and the operation of essential and infrastructure
services. Each of these three functions must be considered separately, for
each has a different bearing on taxation.
As to provision of Law, this is the essential "core function" of
Government. Under the Principle of Liberty Government confines
itself to the provision of law and its enforcement, or more specifically,
those Legislative, Protective and Constitutional Services essential to and
directly related to the protection of Liberty. In the execution of these
duties Government under the Principle of Liberty would be required
to maximize its own productivity, offering the best possible service at
the lowest possible cost. This aspect of Government will be further
explored in a later Chapter.
Essential and Infrastructure Services should be separate from
Government, financially and managerially autonomous though subject to
Government coordination and supervision. This issue is also examined in a
The matter of income-transfer is more complex.
Income-transfer between individuals, more specifically between rich and
poor, is justified by the accepted fact that income does not fairly
reflect labour or work contributed.
This "guilt of wealth" has long been recognized by the wealthy
themselves, as evidenced by the many fine buildings and foundations
established and funded for public welfare by the great industrialists and
traders of the 18th and 19th Centuries.
It has also been used by Socialists as justification for the Welfare
State, which is really a programme of income-transfer since it is paid for
by taxing the rich at a higher rate than the poor.
When we accept that work and reward are not related, and that there are
indeed gross discrepancies between the work people do and the rewards they
obtain, we accept the principle of income-transfer. But in so doing we are
simply attempting to rectify one injustice by adding another. It will be
noted in a later Chapter dealing with Economics and Commerce that through
a system of Pay, Profit and Price Evaluation the Principle of Liberty
would ensure a fair relationship between work and reward, thus
removing both the need and the justification for income-transfer.
A further implication of Pay, Profit and Price Evaluation is that it
creates the basic conditions enabling expansion of the economy to full
employment and full productive capacity. Much if not most of the welfare
and social services expenditure required at present is necessary simply to
compensate citizens for the unemployment, homelessness and poverty
directly attributable to present Government policies.
Income-transfer may also be advocated to subsidize services considered
appropriate to a civilized society, such as Sport and the Arts. But we
should be quite clear as to what is involved in subsidy.
Subsidy occurs when those who claim to want or need a service are not
willing to pay its viable cost. In this case, if the project or service is
to continue, the cost must clearly be met by those who do not want, or use
Consider for example, Government subsidies for the "Arts". This demand
results from the fact that those who claim to enjoy the Arts, in whatever
form is under discussion, are not prepared, or do not rate the services
sufficiently highly, to pay the full, viable cost. They therefore demand
that others with no interest in the Arts, those who may prefer the
delights of nature or devote their leisure budget to a creative hobby or
travel, must be required to make a contribution to a service which is of
no use to them.
This is a form of enslavement, since one person is providing a service
to another under compulsion and without reward.
"Democracy" is often used to justify subsidy: a majority votes for a
service, therefore a minority of non-users must pay for it. But there is a
better, truer form of Democracy we can employ here. The freedom to spend
your money as you wish is a clear expression of Democracy: those who want
a product or service "vote" for it by freely using it and by paying its
viable cost; those who don't are left in peace to spend their money
Another aspect of income-transfer takes place between Regions, as
Governments use taxes to bolster the economies of Regions in difficulty or
those which are on the Nation's economic periphery. Governments also make
extensive use of taxes to subsidize favourite industries or "investment"
projects in new industries or research projects. Ultimately however,
industries must stand or fall on their intrinsic merits and investment
must be judged on similar grounds.
It will be observed in a later Chapter that the Principle applied in
the area of Economics and Commerce provides for a degree of priority
planning in the investment of the National Credit Base, allocating
necessary investment to under-developed Regions, to productivity-enhancing
projects and industries, as well as to essential and infra-structure
services. In this case, however, investment is provided from the banking
sector as loans, not from taxation as grants.
Income-transfer by Governments is a dangerous practice; it distorts
markets and encourages inefficient industries. More unfortunate is its
effect on political conduct and morals, as evidenced in the USA where vast
amounts of money are spent by Political Action Committees to influence the
course of law and the flow of funds.
And citizens tend increasingly to look upon Government as a source of
unlimited wealth just waiting to be milked; they overlook the fact that
Government can "give away" nothing it has not already taken - minus a
substantial "handling fee"!
More importantly under the Principle of Liberty, Government
would simply not be empowered to tax citizens for any purposes except for
those Legislative, Protective and Constitutional Services essential to and
directly related to the protection of Liberty.
Extending the Protection of Law
That the individual's mind, body and property should remain free from
injury and interference by other individuals or by Government is hardly a
But who are the beneficiaries of the law's protection? When we come to
consider extending the benefits of law beyond the Human race there is a
wide gap between present actuality and reformers' ideals - leading to
debate, friction and sometimes violence.
At present we place a high priority on Personal Liberty; everyone has
the right to protection, and equal protection, under the law. We find
quite abhorrent any form of slavery, or of unequal rights for different
classes of citizens.
Yet there are still areas to which we do not consider it appropriate at
present to extend our respect, and the protection of law. Thus while we
may believe that Humans should respect one another, many accept that they
may freely abuse animals, birds, and fishes, in addition to the un-born
If we examine our historical course of political progress, we can see
that the rights of others, to live without pain or molestation and to
follow their own paths of evolution, are continuously being expanded. Thus
the time will doubtless come when we find it entirely natural to regard
all forms of life as worthy of, and entitled to the same respect we show
to one another. We will not kill animals for "pleasure", for sport, or
through simple disregard.
Reformers will, as they have done consistently in the past, seek to
push forward the frontiers of legal protection. Just as slavery was
abolished and the vote was extended, so the time will come when the
protection of law will extend not only to all Humans both born and as yet
only conceived, but to all lifeforms. At such time we will no doubt look
back upon our current slaughter of other forms of life for food and fun
with the same abhorrence with which today we view the slavery practised by
It is a matter of general principle that if the law is too far in
advance of current thinking and the morals of society, it will not be
respected. But the law should nonetheless give the lead in reducing any
and all infringements of liberty. Indeed the law today often lags
considerably behind the popular views of right and wrong, particularly
with respect to animals and the environment.
The Principle of Liberty would require legislation to remain in
the forefront in offering protection to the Animal Kingdom, reflected for
example in stronger protection from cruelty, banning laboratory testing on
animals, and the rapid phasing-out of "factory" farming so that animals
are kept in conditions as closely resembling the natural as possible. This
is not only a matter of animal rights and welfare; much of the
"factory-produced" meat currently consumed contains numerous chemicals and
antibiotics, with highly dubious effects on the Human body.
The Principle of Liberty is fully and accurately reflected, and
Liberty is maximized, when not only every citizen, but every lifeform is
fully protected from personal harm or injury.
Liberty and Enforcement Services
If any citizen suffers infringement of Liberty to any degree or in any
way at the hands of any other citizen, Government is obligated to provide
the necessary Legislative protection.
The administrative or physical force needed to empower this Protective
Legislation is supplied by the Enforcement Services.
The Enforcement Agencies collectively are responsible for enforcing the
law in various ways, from administrative checks of weights and measures to
the physical force of the Police; in cases of suspected lawbreaking the
guilty party must be identified through the Judicial process; and where
guilt is established, there must be restoration to the injured party.
It is largely through these Enforcement Services that Government and
the Law "interfaces" with the public, their customers.
It is therefore important that conduct of the Enforcement Services
should be clearly defined.
The Enforcement Services must not be permitted to initiate infringement
of Personal Liberty. Any interception of a citizen going about his or her
lawful business is an Infringement of Liberty and can only be justified on
specific grounds of suspicion of illegality which must be clearly stated
at the time, and in cases of major interception (search of home or private
property) justified before, and authorized by, a representative of the
The Judicial process of Identification attempts to establish the three
components of an Infringement of Liberty: the injured party, the nature
and extent of the act of infringement itself, and the perpetrator of the
The existence of an Injured Party is central to the Judicial process
under the Principle of Liberty. Without an Injured Party
specifically identified, either the Law must be in error, or the Law is
not applicable in the particular circumstances in question. In such cases
Judges could either dismiss the case, or request a Legislative Review, a
process which will be examined in more detail in a later Chapter.
Once an illegality has been established in a Court of Law, the
Principle of Liberty allows the Court only to require that the
Liberty infringed and the costs involved be restored; it allows no further
intrusion into the lawbreaker's personal freedom. The concept of
restoration is central to justice under the Principle of Liberty;
vengeance and deterrence have no place.
Law Enforcement and Justice are generally well conducted in the
politically mature countries; this tradition must be preserved and
enhanced, and every care must be taken to ensure that no Agent or Agency
of the Enforcement Services is permitted conduct outside the bounds of Law
and Constitutional Regulation.
To this end, Constitutional supervision and enforcement should be
provided, in the form of periodic and random visitation and inspection of
detention and correction institutions.
Chapter 8: NATURAL RESOURCES
National Resources Plan - Urban Development - Landpricing
National Resources Plan
While a person may be considered to have an inherent right of ownership
over him- or herself and the products of his or her own creation, the
Natural Resources pose a different problem.
The Natural Resources are natural. By their very definition they
are not man-made, and are therefore not automatically associated with or
attributable to any individual. But people need to use natural resources
for food, raw materials, habitation, commerce and recreation and must
therefore make claims upon resources which are not inherently theirs. Thus
it is clear that rights to the use of Natural Resources must be created
Various solutions have been found and practised through the ages. The
law may leave individuals to fight out claims amongst themselves, perhaps
with a resulting tenure by a few influential families; the law may attempt
a fair and productive apportionment; or the State (or dictator or monarch)
may take total resources ownership into its own hands.
In medieval Britain monarchs handed out land as rewards to their
supporters, creating the great manorial estates. In the 1800s land-use
patterns changed as agriculture became less important, giving way to
industry and the great urban industrial centres. Thereafter it was largely
the free market that determined land use, and many might believe that this
continues to be the case.
In reality land-use in most developed countries today is determined by
local and national planning decisions based on complex land-use rules and
local planning constraints which have grown up haphazardly over the
centuries, decisions often made arbitrarily and secretively, largely as
reactions to events of the moment without the benefit of long-range
planning or of truly open consultation.
The existing pressures on land-use can only increase, as the
traditional claims we make upon land - for housing, industry and commerce,
transport routes and harbours, agriculture and mining - are now being
extended by increased demands for greater leisure access to countryside,
preservation of areas of outstanding natural beauty, and a greater respect
for the environment.
How would the Principle of Liberty apply to the apportionment
and guidance of resources use?
We begin with the Principle of Liberty itself, the essence of
which is: liberty, until that liberty infringes the liberty of others. On
a basis of presumed liberty, the duty of government is to identify and
prevent through legislation those actions which are harmful or injurious
Applied to land-use, we begin with the individual's freedom to use,
according to his wishes and benefit, land to which he holds or may legally
obtain title. The duty of government is to review individual uses of
resources in order to identify and prevent those which are
disproportionate or detrimental to other users or to the environment.
In order to establish a basis for fair, equitable and responsible
resources use, the Principle of Liberty would require three steps:
First, as a working foundation, the formulation of an overall National
Landplan based on a full inventory of natural resources; second, estimates
of current and future demands; and third the institution of a
Resources-use Forum in which availability can to the best extent possible
be reconciled with actual and anticipated demands.
Land has its own inherent potentialities. Certain areas may offer
excellent agricultural soil while others conceal significant mineral
deposits. Some areas are outstanding in natural beauty, while certain
forest or river systems make their own demands for special treatment on
ecological grounds. Clearly Government cannot fulfill its role as
adjudicator unless and until it is fully informed as to the detailed
nature of the nation's total natural resources.
The inventory of availability would take the form of a national map on
which every kind of resource is clearly indicated.
The duty of those concerned with the provision of availability data
must be to provide a detailed, continuously updated - and publicly
accessible - inventory showing the location, extent and nature of all
The Inventory would show, for example: mineral deposits, water
supplies, agricultural land graded as to quality and suitability for
different crops, areas of outstanding natural beauty, areas suitable for
urban settlement, as well as those areas or resources which should be
handled with especial sensitivity as being appropriate for wildlife
preserves or necessary for environmental wellbeing.
The second stage requires the preparation of an ongoing assessment of
demands upon the resources both current and anticipated, based on a
thorough and fundamental analysis.
As a basis the analysis begins objectively by looking at populations
and their broad, predictable needs for urban living, trade and cultural
facilities, agriculture, minerals, recreation and retreat. Individuals and
special-interest groups as "consumers" will then fill out the picture with
additional needs and ideas such as wilderness homes or specific recreation
The two banks of resources data: the Availability Inventory, and the
assessment of actual and anticipated demands, can then be coordinated by a
Natural Resources and Land-use Forum to produce an overall ongoing
National Resources Plan.
On this basis, clear guidelines can be established for such broad
national uses as major agricultural needs, recreation, mining, transport
and urban development.
The Land-use Forum should have its purpose and procedures clearly set
out in its own Articles of Constitution. Its members should represent
every aspect of land and resources use; its deliberations, as well as the
data on which they are based, must be open at all times to public scrutiny
Its object is an ongoing National Landplan, representing the continuing
definition of zoning and planning guidelines and restrictions at national
level, from which local level plans can then be made.
But it is not only our Human requirements that we must consider.
We need to use the Natural Resources, certainly. But we must do so
within the limitations of environmental responsibility, and we must give
back the equivalent of what we take through our stewardship and
enhancement of our environment.
This necessary approach to our relationship with our environment can be
formalized and brought into the overall resources-use planning process by
the simple expedient of according to the Environment the status of a
legal entity having its own rights, defined in law, to respectful
and responsible treatment and to good stewardship, rights which must stand
as equals in law to our own competing Human claims. Just as minors are
represented by Counsel in courts of law, so the environment should be
permanently represented by an Environmental Protection Council
operating under Constitutional authority.
Some environmental objectives might be listed as follows: zero
land/water/air pollution; zero garbage, requiring a determined effort to
eliminate garbage at source, for example through recycling and increased
use of reusable containers; phase-out of factory farming and pesticides,
promotion of organic farming; identification and protection of all
significant natural ecosystems and major wildlife habitats.
Under the Principle of Liberty broad planning guidelines would
be based on objective data providing accurate information on availability
and informed estimates of present and future needs, formulated with the
widest possible input. It is our human challenge, particularly as
population pressures increase, to use our resources wisely and
responsibly, minimizing waste, providing for as many needs as possible,
and reaching decisions in the common interest with the minimum of
misinformation and acrimony. Interestingly, a similar policy of land-use
is applied in the United States to the administration of that country's
surprisingly vast area of Public Lands. It is little known outside the
United States that some 270 million acres, about one-eighth of the USA, is
managed by the Bureau of Land Management (BLM) - in addition to land
already set aside for National and State forests, parks, and wildlife
The BLM has been mandated by Congress to manage Public Lands on a
continuing basis for multiple use and sustained yield, taking into
consideration the reconciliation of the varied demands made upon the land,
as well as concepts of stewardship and husbandry.
As the American public becomes more interested in outdoor leisure
activities and aware of environmental issues, a broad national debate is
taking place regarding the uses and protection of lands in public care.
Indeed awareness of environmental needs and potential damage is increasing
on a global scale. We are also becoming more aware of the need for economy
in the use of land; its scarcity becomes more acute as populations and
their needs expand.
By far the most important area for conflict-resolution and forward
planning in resources-use lies in our towns, cities and built-up areas.
And here there is more at stake than simple land-use issues; for the
town or city is a service in itself, a machine which must be properly
designed and maintained if it is to function efficiently and fulfill the
demands of its residents, its customers.
Homes, jobs, shops, factories and offices, market gardening, leisure
facilities, all of these and the many other needs of a civilized society
are part of what may be called community.
An efficiently functioning community offers a wide variety of
facilities and opportunities in pleasant surroundings, with easy and
convenient movement between them. Needless to say, a sprawling city served
by traffic-clogged streets would not be described as functioning
If high standards are to be developed and maintained and if productive
use is to be made of scarce land, the science of community design and
management must be developed beyond the random reaction and
counter-reaction on which we have relied in the past.
An important aspect of National Resources-use planning is the
identification of the major urban centres with their dependent surrounding
regions, and the transport routes joining them.
In Britain and Europe, the old market towns developed as centres for
trade and culture serving their surrounding villages, farms and
countryside. Movement was on a radial pattern linking the surroundings
with the centre. Though movement patterns have now become confused by
random development, the basic nature and purpose of the town or city
centre remains: it exists to serve as a focal point for the surrounding
communities, providing opportunities for work, trade, and culture, the
centre linked like a web to its outlying, dependent area.
Villages, each with its convenience store, church, kindergarten and
recreational green, are linked to their nearest town which offers a wider
choice of goods, services, employment and activities; towns and city
suburbs are then linked to the central city, providing those highly
specialized employment opportunities, goods, services and activities which
can only be supported by the overall regional market and population.
The totality of city with dependent towns, villages and countryside is
the County or Region, ideally of about three-quarters to a million people,
self-sufficient in jobs, in choice of goods and services, cultural and
intellectual amenities, with open land offering space for
market-gardening, leisure and recreation.
The importance of re-establishing and redefining Regional Centres lies
in focalizing commercial development at the centre and providing
coordinated transport links. On this basis, the limits of villages, towns
and cities can be defined, waste land can be developed, and new commercial
and residential developments can be coordinated with transportation.
The fundamental definition of the Community, its nature and its purpose
establishes that the Community or Region is not simply an assemblage of
unrelated parts, but a working system in its own right which needs
fundamental and coherent planning if it is to function efficiently whilst
preserving character and a pleasant livable environment.
It is particularly important that transport patterns and routes be
clearly established. The Regional Centre must become the focal point for a
radial public transport system serving the surrounding Region/County.
These radial transport spokes would serve the dependent towns, with
ongoing links to the smaller surrounding villages and communities.
The question of transport mode is also important, and here we
are faced with two choices: the private car versus shared public
transport. Experience has now shown clearly that the road/car system alone
is not capable of satisfying our needs for fast, safe, reliable
Building more roads simply increases urban congestion and pollution,
with commuting speeds reduced in many case to near-immobility – the result
of planning decisions which favoured private almost to the exclusion of
public transport. The efficient functioning of livable communities, as
well as the effective use of land and the minimization of pollution
clearly indicate the need for an active revival of public transport
However, public transport can only serve efficiently when it is
coordinated with urban development, returning once again to the need for
informed long-range planning both at National, and Regional level.
Our traditional residential planning concepts, based on wide roads for
car access, combined with road widening and provision of more parking
spaces in towns and cities, only perpetuate our dependence on the car,
since spread and sprawl can only be served by individual vehicles. Thus
the demise of public transport becomes inevitable. Only in compact
residential and urban developments can public transport flourish viably.
By concentrating rather than sprawling new urban and residential
developments and by linking them with the Regional transport system we can
provide both transport for the Community, and customers for the transport.
In the case of existing towns and cities, planning should seek to
minimize waste land, either by infilling with residential development, or
by creating parks ad green spaces. Where new developments are taking
place, we need to seize the opportunity and the challenge to provide
homes, places of work, and commercial facilities in ways which can set new
standards in self-sustainability, and minimal environmental impact.
Self-sustainability implies making zero demands on sewage and garbage
disposal systems by recycling and using natural methods of sewage
treatment on-site, and minimizing demands on power generation with designs
which maximize the benefits of solar power and take account of local wind
and other environmental factors.
Minimizing environmental impact requires additionally the minimization
of footprint through compact development and the visual integration of he
development with the natural surroundings.
We need to look at totally new concepts in urban development. An
artificial hill, for example, with apartments sited on its sloping
exterior and commercial facilities inside its core, would create a single,
compact and unified residential/commercial development with a dramatic
reduction in the use of land surface and the need for transportation. If
the apartment terraces covering the “hill” surface are generously planted
with vegetation, this artificial hilltown can blend perfectly with the
surrounding countryside. Access behind the apartments gives each apartment
frontal privacy and an unobstructed view, while the slope ensures that
each apartment terrace is vertically open to sun and sky. Access to
internal shops, offices and production facilities inside the hill requires
only a few minutes walk or elevator ride.
The existence of an underlying National Plan based on a thorough
analysis of available resources and Human requirements, together with
improved urban planning and a policy of compact development would provide
the foundation on which we can begin to rebuild an efficient,
comprehensive, coordinated public transport network.
With shared transportation playing a larger role, town scale can be
humanized and centres pedestrianized with improved amenities. Commercial
centres can be reinvigorated through environmental enhancement,
pedestrianization, and full integration with public transport facilities.
Effective use of scarce land, environmental improvement both rural and
urban, as well as pollution reduction, all demand a firm and active policy
commitment to the rapid improvement and expansion of public transport, and
the coordination with public transport of all new residential and
In the present context we are only considering Government's role of
planning and coordination of resources-use, urban and transport planning.
The status, both financial and managerial, of public transport
administration relative to Government will be discussed in a later
Chapter, as also will be the provision of capital for infrastructure
services from the National Credit base.
The issue of fair prices relating to goods and services will be
discussed in the next Chapter dealing with Economics and Commerce. In the
present context we must consider the question of land prices.
It has always been assumed that land prices should be determined by the
free market. But its results are not always beneficial. The free market
works at its best when there is multiple competition; when scarcity drives
up prices, that is a signal to produce more. But when land is in short
supply we simply cannot produce more, so prices are bound to rise.
Rising land prices tend to favour sprawl, as homes, shopping malls and
businesses naturally seek to move out to areas of less value.
More seriously, rising land prices are economically regressive.
Prosperity is created by productivity, by increasing value without
increasing cost. Rising land prices do just the opposite: they increase
the cost of land without increasing its inherent value, and this has a
similarly inflationary effect on the services using land. This is
particularly evident in major cities, as "value" in the sense of what
buyers get for their money, decreases as land prices increase.
There is little or nothing in the way of goods and services which is
not affected by the price of land; rising real estate prices affect
everything from offices to retail shops, cafés, and places of
entertainment. The escalation of land prices is a major contributor to the
high cost of urban living. It can also cause a deterioration in urban
quality of life; many of Europe's old established city cafés which have
for centuries been centres for meeting and socializing are now being
forced to close as a direct result of escalating rents.
If the city or town centre is to retain or regain and develop its
function as a gathering place, it will be necessary to ensure that newly
developed areas in city centres, particularly areas reclaimed from public
or industrial use, should be subject to price stability so that rents are
economic for those low-profit uses such as markets and cafés which provide
vitality and enjoyment for users. This could be accomplished, for example,
by vesting tenure in the hands of a locally administered Urban Trust,
which would then ensure maintenance and management of the facility either
itself or by a contracted agency.
Of equal importance is affordable housing. A home is one of the very
foundations of life itself. In many developed countries today house prices
have already risen beyond the point where young people entering the market
can hope to afford a decent home. In Britain much of the nation's housing
stock was built to minimal standards in the 19th century and is no longer
worthy of a civilized society.
The provision of new affordable housing requires a determined effort to
study and to implement the latest and most cost-effective building
techniques from around the world, especially the USA. Building-land costs
must also be minimized; this can be achieved by utilizing redundant
industrial land, and by locking-in present agricultural prices when
agricultural land is given over to housing development. New homes built in
the "affordable" category should be rented or leased rather than sold
outright so that resale prices can also be stabilized.
We should be looking not at subsidy, but at the maximization of
productivity and the avoidance of inflated land costs. Whatever problems
exist must be overcome: increasing cost without increasing inherent value
is economically regressive, raises the cost of living, reduces prosperity,
ties up increasing amounts of capital, and puts a home, that most basic of
Human needs, progressively out of reach, particularly for young families
seeking starter homes.
It is the responsibility of Government, at national and local level, to
ensure through informed, participatory and enlightened planning that the
Nation's natural resources are used fairly, productively, and responsibly.
Chapter 9: ECONOMICS AND COMMERCE
Value – Full Employment - Investment
Economics and Commerce
The Principle of Liberty defines the duty of Government as the
formulation and enforcement of Legislation which will ensure that in the
exercise of their liberties citizens do not harm, injure, or infringe the
liberties of one another.
The Principle of Liberty thus rests on a Presumption of Liberty,
the presumption that the individual is free unless harming or injuring
In business and industry this corresponds to a presumption of Free
Enterprise as the basis of Government economic policy.
While it is vital to allow citizens' enterprise and initiative to
realize its full potential in the creation of prosperity with minimal
government interference, formalities and red-tape, it is equally important
to ensure that citizens do not enhance their own prosperity at the expense
of others through unfair or dishonest practices. A high standard of living
and prosperity is already technologically within our grasp, and we have
human talent in abundance which is constantly creating new ideas and new
products; there is no need to obtain wealth through the disadvantagement
Government should intervene promptly when necessary to ensure that
business is not carried out in ways which are detrimental to co-workers,
customers, or the environment.
It is equally important to avoid over-regulation. Even in self-styled
capitalist, or free-market countries, business is becoming increasingly
over-burdened by government regulation, much of which is not directly
concerned with ensuring fair play in the market place. Excessive
regulation places a heavy financial burden on business which must
eventually be borne by its customers resulting in higher prices and a
correspondingly lower standard of living.
The Principle of Liberty would not permit Government to own or
operate commercial services. The role of the Private Sector is creative
and productive; the role of Government is regulatory. If Government does
its essential job of making sure that business and industry conducts
itself in a socially responsible manner there is no need for
Indeed, it is important to stress that Government ownership and
operation of any commercial service or business invalidates Government's
ability to legislate without bias; to whom does the citizen complain about
industrial pollution when the Government owns the polluting industry?
Law is brought into being to prevent those actions which are harmful or
detrimental to others. But the law is limited to providing the protection
of liberty from identifiable infringement, and should avoid oppressive or
intrusive law which itself constitutes a prime erosion of liberty.
This gives us a policy approach, not of unregulated Free Enterprise on
the one hand, nor of Socialistic takeover by the State, or burdensome
over-regulation on the other, but a policy falling between the two, a
policy of Socially Responsible Free Enterprise.
Under the guidance of this policy the role of Government in the area of
the economy, business and commerce is clearly defined; its essential task
is to identify those areas of potential commercial conflict in which the
actions of some participants may be detrimental to others, then to prevent
such actions through appropriate legislation.
The major point of contact between the various participants in business
and commerce – employees and employers, producers and consumers, as well
as investors – is trade or exchange. And the main aspect of exchange is
value, the value of an employee's work, the value of a product or service,
as expressed in Pay, Profits and Prices.
At present, Pay, Profits and Prices are determined by disputation.
Employees dispute, often violently, with employers over pay, to the
detriment of good industrial relations and productivity.
Prices are determined by "what the market will bear" and by overall
economic conditions; the price, in other words, is as much as the producer
There are no political rules by which we can determine a just
remuneration, a reasonable profit or a fair price; disputation is the only
way open to us.
Its supporters call it the "Free Market".
Another view is that it is conflict without rules, and as such
represents an aspect of anarchy. Its damaging effects on the economy and
prosperity are substantial and far-reaching.
A policy of Socially Responsible Free Enterprise requires
Government to replace anarchy, wherever it may exist, with fair
And if Government were to be charged with providing a foundation of
fair rules for industry and commerce, a first priority would be the
provision of a system of fair rules whereby pay, profits and prices are
determined by measure and consensus rather than by disputation.
There is a growing resentment in the developed world against the
ever-widening discrepancy between rich and poor resulting from what is
perceived as unfair remunerations for upper-echelon managers and
executives. This is perceived particularly in Europe, where the
Netherlands for example is already enacting legislation to limit
executives' salaries and severance payments. Fair rules for pay and salary
determination would remove one of the major elements of contention in our
industrial relations, paving the way for increased cooperation and
A further significant effect would be on unemployment and the level of
economic activity in the country as a whole. The current pay, profit and
price evaluation by disputation creates an inherent instability and a
strong upward pressure which if uncontrolled leads to inflation. It is
universally recognized in economic circles, though rarely spelled out,
that the current economic wisdom requires the economy to be
maintained at substantially below its productive capacity with permanent
unemployment in order to control inflation.
A National Standard System setting guidelines for Pay, Profit and Price
Evaluation would create the monetary stability necessary to permit
economic expansion to full employment without inflation.
"Fair pay and prices" may sound like an ideal impossible to define or
to attain; in fact experience and commonsense define it, we have already
attained it, and practiced it on a wide scale.
Pay is fair if it is an accurate reflection of work contributed. And it
must also relate to the work and the pay of others: pay for one is fair if
others doing similar jobs are paid the same. Fair pay is easily defined;
but is it so easily attainable?
If pay is to be related to work done, this would require a system of
Job Evaluation for measuring and evaluating work. If we can measure work,
then the work amount or work value of each job can be
reflected in the pay received for doing that job.
In fact, Job Evaluation is already a process well established in
certain large companies and government agencies for defining, evaluating
and measuring the different work characteristics demanded of a job, and
expended in the fulfillment of that job. Though there are different
approaches of detail, the basic principle is simple. It begins with work
Work means many different things; each and every kind of work, or work
component, must be identified and quantified.
The list of work types or characteristics will include such basic
elements as previous training, skill, concentration, responsibility,
physical exertion, working conditions, job satisfaction (or boredom!),
health and safety hazards, and so on. The list need not, indeed should not
at any time be conclusive. New characteristics must be added as they are
identified, developed, or called into being by new techniques. Technology
does not stand still; new jobs are constantly being created, with new
demands made upon human skills and effort.
Once identified, each work type or characteristic is given its own
scale of measurement.
The common objective in any Job Evaluation system is that all jobs
within a company using the system are evaluated fairly and consistently,
giving each job a meaningful value in relation both to the work involved,
and to other jobs within the company, through a common scale of definition
The job-value thus established can then be related directly to
remuneration. Job Evaluation becomes Pay Evaluation.
The application of a system of Job Evaluation throughout a company
ensures that each individual's pay relates to work contributed, and to the
pay which others in the organization receive for their work contributions.
Job Evaluation has been widely used for many years to bring system and
consistency to the pay structures of major organizations and companies in
both the public and private sectors.
At this stage we already have in existence a fair and stable
measurement system for defining and evaluating pay. Indeed we have several
competing systems. In one sense this is counter-productive, since it
creates problems of inconsistency between companies using different
systems. On the other hand it provides a wealth of experience and input
which could form the basis for a single National Standard System.
Indeed if the formulation of a National Standard Evaluation System were
to be conducted through the widest possible debate, participation and
consensus, the very process itself would clarify issues and build mutual
understanding between different occupations and skills. And as we move
imperceptibly but inevitably towards discussion of principles rather than
personal self-interest, the process would effectively lay the foundation
for a new kind of industrial unity.
Government would begin by establishing a fully representative Committee
to formulate a National Standard Job Evaluation System (subject to ongoing
revision by a permanent Council). The Standard Job Evaluation System would
be published in popular papers as a Do-It-Yourself form together with full
explanation and sample completed form. This would enable everyone to
become familiar with it, and to bring out any additional comments or
The System must be comprehensive, simple to understand, and capable of
application to all types of work at all levels, from boardroom through
management to shopfloor.
With a single guideline System of Job and Remuneration Evaluation
agreed, tested and established as a National Standard, the ideal of a fair
day's pay for a fair day's work could become a reality.
But even if we include pay at all levels, pay is only a part of the
solution; for pay has value only in terms of purchasing power, or prices.
Fair pay has full and real meaning only in terms of fair
prices. This leads to a parallel question: what is a fair
A factory's, or a business's total costs consist of three elements:
first, the cost of bought-in raw materials and components; second, the
direct labour added in the factory; and third, the costs of capital
write-off, overheads and finance. These are the costs of making a product,
of supplying a service.
From these costs a Unit Production Cost can be calculated for each
product or service supplied.
If this Unit Production Cost then becomes the Selling Price there would
be a direct and fair relationship between cost and price, and therefore
between pay and purchasing power.
But the Unit Production Cost is not normally equated with the Selling
Price. The difference between the two is commonly referred to as the
profit and will remain a matter of potential contention thus
threatening or even invalidating any progress made in achieving pay
Completion of the social and monetary stabilization process begun with
a standard system of job evaluation would require some kind of consensus
on the disposal of profits, for this is the only way fair and stable
prices can be achieved.
There are several claims to a share in a company's profits.
Investors must be given a return on their capital; and increasingly,
employees are being given a share in the profit as a form of remunerative
recognition for extra effort and cost-savings.
Another major destination for the disposal of company profit is
reinvestment, either in research and equipment or increased working
capital, the advantage being that in-house or self-generated investment
comes without future servicing cost or commitment to repay.
There is one more claimant to a share in the profits, and that is the
customer. Indeed with the growing recognition of Pay and Price
Evaluation the profit would increasingly be perceived as a "tax" on the
price over and above its production content, and should therefore belong
to the consumer as much as to anyone. With this view a substantial claim
on profits would come from the consumer in the form of lower prices.
The objective should be the establishment of public policy for profit
This could take the practical form, first, of an overall profit
ceiling. Britain's National Health Service already assesses prices for new
drugs and services before certification; the ideal of a fair price
resulting from a fair profit is hardly revolutionary.
Of the profit made, broad percentage bands could be established and
gradually stabilized, distributing profit according to pre-set guidelines
as between co-workers at all levels, investors, and the internal needs of
capital for reserves and reinvestment. The dividend paid to those
investment sources not negotiated in terms of fixed interest should be
clearly and openly defined with average or upper limits.
As it does today, Government would continue to require that companies
prepare in timely fashion properly audited annual accounts. But instead of
assessing the total profit in order simply to 'take a cut" for its own
coffers, Government would be examining the profit in order to ensure that
it is apportioned according to a consensus formula which respects the
claims and contributions of consumers, investors, co-workers, and the
future security of the business itself.
Achieving full employment
Under the Principle of Liberty, fair pay, profits and prices
achieved through system and consensus is an important aim in its own
There are further significant implications affecting industrial
relations and stability, economic growth, the level of national
employment, productivity and prosperity.
Governments, and many economists, tend to speak of unemployment rather
like the weather – unfortunate perhaps, though clearly unavoidable. But
unemployment is not an Act of God, it is an Act of Man.
It begins with Governments which fail to provide fair rules for the
evaluation of pay, profits and prices. In this situation of unspoken
anarchy, people naturally look to their own interests. Employers seize any
opportunity of making a gain at the expense of their employees or
customers, while employees take every opportunity to squeeze more money
out of their employers. The fact is that we settle pay and prices by doing
This produces a basic instability and continuing upward pressure which
can only be held in check by maintaining a degree of permanent recession.
When the economy is booming, producers can get away with raising prices,
while employees take advantage of the tight labour market to push for
higher wages and salaries.
Cool the economy a bit by raising interest rates and introducing an
element of deflation, and both wages and prices are held in check if not
reduced. Thus full employment and a fully occupied economy remains a
dream, together with the rise in overall prosperity it would have
A secure foundation of Pay, Profit and Price Evaluation by measure and
consensus would create a basis of fair reward for work and the real
possibility of industrial peace and cooperation.
It would also establish a basis of monetary stability from which
economic expansion could take place without inflation, leading steadily to
sustainable full employment. And the degree of employment – or
unemployment – in an economy has its own substantial effect on
productivity and thus prosperity.
The socially damaging effects of unemployment, the cost to working
taxpayers of unemployment benefits and the loss to the economy of
potential talents can readily be seen. A less obvious result of
unemployment lies in its effect on productivity.
It should be remembered, first and foremost, that prosperity
comes from productivity. We do not become prosperous by working
harder, for this can bring higher wages, but at the expense of free time,
family or even health. We become prosperous by working not harder but more
efficiently, by continuously developing improvements in design, production
and management techniques which allow us to produce more and better goods
and services with less work.
Productivity, making better goods and offering better services tomorrow
with less work than it took yesterday, is the motive power which drives
economic development, produces prosperity, and advances civilization.
But productivity, by its very nature, means less work; so where does
that leave the redundant workers? In a properly organized economy
operating at full capacity, workers made redundant in one department by
improved productivity would normally be transferred to another within the
same company, with additional training as required. Even if an entire
sector of industry becomes outdated, workers can always re-train and take
up employment elsewhere.
But when the economy is under-utilized and there is substantial
permanent unemployment, anyone who has a job is afraid of losing it. One
simple and quite understandable result is that no-one will be looking very
hard for productivity improvements; and when management proposes some
productivity-enhancing modernization it will probably be opposed by
workers fearful of redundancy.
The moral is simple: substantial permanent unemployment causes
opposition to productivity improvements. And since productivity is the
source of prosperity, we are effectively opposing prosperity.
But the opposite also holds true. With the economic and industrial
stability which would come with National guidelines on Pay, Profit and
Price evaluation, the economy could be expanded steadily to sustainable
With full employment, productivity could also be increased without
opposition, adding its own contribution to increased prosperity.
We need to consume. We need food, clothing and shelter, plus power,
fresh water, communication facilities, and an ever-increasing inventory of
products and services. Because we need to consume, therefore we need to
produce, to add invention and labour to natural resources in order to
provide ourselves with the goods and services we want and need to consume.
The adoption of a monetary system, a common medium of exchange,
facilitated the growth of specialization and mass production.
Today we live in a highly complex society, an economic
producing-consuming inter-relationship which requires an equally complex
financial infrastructure which can provide facilities for daily
account-keeping, for trade, for saving, and most importantly for
investment in industry which becomes ever more specialized and
capital-intensive, thus requiring adequate guaranteed investment.
To provide the necessary finance, the banks are authorized to create
loans for personal requirements and industrial investment, secured by the
borrower's collateral, and the bank's own reserves. Our Banking System,
with its apparent ability to create money and credit out of thin air,
dazzles with its aura of mystique. It is an Institution with
near-religious sanctity which none save the Initiates dare to touch.
And because we accept without thought or question the need for a
financial framework, it is natural to assume that the Banking System which
currently provides that framework is also a part of the national
infrastructure and is there to serve the nation – like the public
utilities, water, power, and sewage disposal. And we blame the Banking
System when its members act irresponsibly, building up huge gambling
losses which require taxpayer bailouts.
But in heaping blame and discredit on the banks we are making a serious
mistake: the banks are not a part of the nation's infrastructure, working
to serve the nation and its good citizens. The banks are private
companies, in business to maximize profits, if possible on a quarterly
basis, for their directors and shareholders, using any method at their
disposal. By tradition fairly conservatively managed, over the last ten
years banks have found it more profitable to engage in gambling using ever
more complex devices, than to support industry – especially now at the
bottom of an apparently never-ending recession.
Banks, from the smallest to the biggest, in the USA, Britain and Europe
have bankrupted themselves through losses on hi-tech gambling and
speculative property loans, requiring bailout from taxpayers through their
governments – governments which are now themselves deeply in unsustainable
debt which they are finding increasingly difficult to finance.
Government bonds, once considered the most secure of all possible
assets, are now viewed with caution by the bond markets which demand ever
higher interest rates as added security against partial default. In
several European countries, banks are being quietly pressured by
governments to buy more government bonds – the irony of failing banks
supporting bankrupt governments which support failing banks seems to have
gone largely un-noticed.
In order to bring down their deficits, governments resort to the old
familiar remedy: austerity, involving spending reductions and tax
increases. The result is recession. Ordinary folks want to consume. And to
do that they need jobs. They are all willing and able to work, to produce
the goods and services they need to support themselves and their families.
They are not at fault.
It is the increasingly unsustainable debts of governments caused by
waste, over-manning and low productivity, combined with banks' gambling
debts and their reluctance to support a troubled economy that are to
blame. Indeed government regulators' demands that banks reduce their loans
relative to their assets leave banks with only one quick and easy option:
reduce and/or withdraw loans to business.
The Economist 20 May 2012 reports "In Portugal loans to
non-financial companies fell by 5% in the first quarter compared with the
same period last year. One of the conditions of the country's bail-out
programme is that banks should reduce their total loans to 120% of assets.
The quickest way to do that is to avoid making loans. Spanish businesses
are experiencing similar financing problems.
"Conditions are little better in Italy. The province of Varese, near
Milan, is a manufacturing heartland: its factories make plastics, textiles
and a range of engineering products. The local bosses' association says
that 40% of firms were hit by lowered borrowing ceilings between January
and March, and 15% were told to pay back loans. Banks turned down 45% of
requests for new funding. If firms cannot borrow from banks they lengthen
payment terms to their suppliers, exacerbating the credit problem. Fashion
is Italy's second-largest export industry, but no sector has a higher
level of non-performing loans."
Stuck in a recession with little prospect that the Banking System will
lift a finger to get us out of it, and governments looking to save money
rather than hand out grants for infrastructure, we need to explore
alternatives. More specifically, a nation in recession needs investment in
industry and infrastructure, work which will create jobs now so that
people can pay down their debts and start spending, so increasing tax
revenues to reduce government debt. But governments and banks are neither
able nor willing to provide the investment needed. They got us into the
trouble we're in, and neither is capable of getting us out.
So what about the stockmarket – surely this has always been the classic
source of capital for industry. Indeed, stockmarket traditionally, and
ideally, exists to provide companies with equity capital and to give
investors a stake in economic growth. But over time that simple truth has
been forgotten or abandoned, both by companies and savers as potential
Companies have tended to reduce their equity capital (via share
buy-backs and takeovers) over the past ten years, rather than increase it.
In Britain, new issues have been fairly rare and the larger flotations
have often been foreign companies seeking the prestige of a London
listing. Indeed, there has been an international trend for companies to
finance their investment plans with debt or from their own resources. Even
when companies do float (like Facebook), their aim in raising money is to
let seed investors realise their stakes, rather than to finance expansion.
Nor are shareholders exercising their traditional role of supervising
the capital-allocation process of corporate executives. Investors failed
to restrain the reckless acquisition strategy of the Royal Bank of
Scotland or the aggressive expansion of Northern Rock's balance-sheet in
the past decade.
Domestic pension funds and insurance companies, which occasionally did
act as a brake on management, now own only 20% of the market, compared
with 50% as recently as in 1991. The time when savers scanned the company
reports in the financial papers, selecting steady, well-managed companies
as a vehicle for longterm investment and steady dividends is long past.
Today's participants in stockmarkets are not savers researching and
investing in well-managed companies. Stockmarkets are now peopled by
traders seeking quick profits, as participants engage in high-frequency
trading powered by computers swapping shares with each other every
millisecond. Even the more serious investors expect positive returns every
quarter, and drive down the share price when the figures disappoint.
Yet the demands of industry for secure longterm investment remain as
strong as ever; thus there is a clear need to review the requirements of
the nation's financial infrastructure and the extent to which they are
fulfilled, or not, by the current financial system.
The basic principle of banking is that credit is generated to finance
investment in productive enterprise based on some form of security,
currently the borrower's collateral, and the bank's own reserves. But new
business does not necessarily have sufficient collateral to provide the
equipment necessary to maximize quality; and as for the banks' reserves,
many banks are still holding a toxic mix of bad real estate and the bonds
of deeply indebted governments.
An alternative way to ensure the security of investment credit is by
relying on the project itself, thoroughly researched, then backed by
on-going monitoring. This is by no means a new idea.
Founded in 1956 in Basque Spain, the Workers' Bank of the Mondragon
Cooperative provides investment as a local development bank, the loan
based on and secured by the project itself, thoroughly researched and
supported with technical and financial advice, its progress monitored
after startup for production, quality, and financial performance in a
process of ongoing cooperation and partnership.
This also assumes longterm commitment, ensuring finance for secure
long-range planning and productivity investment, research and development
into new-generation products and services, in conjunction with
apprenticeships and higher education which are also sponsored by the
Cooperative. The group now employs 85,000 workers with a turnover of 15
billion Euros. Similarly, investment secured by the project itself and its
anticipated revenue can also be used to finance infrastructure and urban
Tax Increment Financing (TIF) is already established as an effective
investment tool for a city to create jobs and promote economic
development. Finance is provided in the form of an investment loan to be
repaid through an increase in tax revenues resulting from infrastructure
improvements. The City of Chicago estimates that TIF funds have created
and generated more than a $12 billion increase in property values
throughout the City since its inception in 1984. Chicago now has 158 such
zones, covering 29% of its land and 13% of its property by value.
Applying this technique of Project-Secured Investment we can take
action today, right now, to create jobs, improve infrastructure, and
provide industry with the adequate, longterm finance it needs to maximize
productivity and most importantly, maximize quality.
A network of Regional Investment Agencies, authorized to provide
industrial and business investment based on thorough research and on-going
monitoring of the recipient business, can spread growth across the nation,
creating jobs and providing the wherewithal for existing companies to
increase their competitiveness, as well as for infrastructural
improvements. Investment targeted regionally can bring industry and growth
to traditionally backward areas.
The Regional Investment Agencies would thoroughly research each loan
proposal from design to production, management and sales, calling on
outside expert advice and assistance where necessary, followed by a close
working and constructive partnership with the successful loan recipient,
then continuously monitored with an ongoing flow of performance data.
Many of today's successful businesses grew over many years and a long
hard climb, starting with minimal capital, operating on a shoestring, and
reinvesting every penny of profit. Regional Investment Agencies can
provide sufficient capital for a good business venture to start at full
operation, properly equipped for maximum productivity. Indeed, conditional
insistence on the highest standards of product and service quality can
increase competitiveness, and the high level of productivity which creates
real and lasting prosperity.
Regional Investment Agencies, their loans firmly secured on the assets
and ongoing monitoring of thoroughly researched industrial and
infrastructural projects, can create jobs and industries NOW, with
genuine, repayable investment loans, avoiding the need for
deficit-increasing grants. Individual homes can also benefit from
investment loans, for example to install double-glazing or roof
insulation, work which itself provides further employment. Such loans
would qualify as investments, being repayable from savings derived by the
borrower through lower energy bills.
Regional Investment Agencies, through Regional Housing Corporations,
can also provide lowcost financing for new housing, for rental or lease
"at-cost". The Housing Corporations would acquire "grey" ex-industrial, or
unused agricultural land at its current price, rather than the inflated
"with planning permission" price for the construction of quality,
environmentally attractive cluster housing, yet built using techniques of
fast-track mass-production. Availability of at-cost housing would make it
possible once again for young families to afford that most basic of all
needs: a decent home in pleasant surroundings.
A major element in the economic and financial disaster of 2008-11 was
the phenomenal rise and catastrophic fall in house prices which also made
a major contribution to the Great Banking Crisis. A pool of lowcost rental
housing would provide an "anchor" to slow down the next housing bubble.
The wider concept of banks and financing facilities established
specifically to provide investment for industry and infrastructure is by
no means new, and many precedents can be found.
Napoleon III became President and self-styled Emperor of France in
December 1852 at a time when industrialization and scientific discovery
were already gaining pace in Europe. This in turn required that banking
should promote industry and infrastructure, in contrast to the existing
banking system in France which was almost exclusively, and very
conservatively managed under Baron James de Rothschild.
Under the direction of the Pereire brothers and the patronage of
Napoleon, the newly established Crédit Foncier and Crédit
Mobilier financed and promoted investment in the expansion of the
textile, chemical, steel and metallurgical industries, and the
modernization of agriculture. The rail network was increased from 3,000 km
in 1852 to 18,000 km in 1870, and the complete renovation of Paris between
1853 and 1870 was undertaken by the Seine prefect, Baron Georges- Eugène
Haussmann. The addition of further large banks focusing on industry
ensured strong economic growth and industrial development.
In 1818 the Swedish government offered 160,000 Taler to Westphalia as
reparation for damages incurred during the Napoleonic Wars. This money was
decreed the property of all Westphalia by its President, and the
Westphalian Hilfskasse, or 'Assistance Bank' was established to
develop the region's economy and pay for public-works projects.
This proved highly successful, prompting the king of Prussia to order
that a similar bank be created in the Rhineland in 1847. Both banks later
became Landesbanken (Regional Banks), and were instrumental in making the
Rhine-Westphalia region one of the most productive industrial areas in
In the post-WW2 years, the Landesbanken again played a major
role in the creation of Germany's 'Economic Miracle', in particular
through the provision of secure on-going finance to the German
Mittelstand (small and medium-sized companies) in their respective
regions. With 3 million mid-sized businesses, the Mittelstand
industries employ more than 70% of German workers and contribute
roughly half the country's GDP.
In the USA, the Bank of North Dakota (BND) is unique in being a
State-owned bank, dedicated to promoting commerce, industry and
agriculture. BND offers numerous low-interest loan programs in
collaboration with a lead lender to meet the financing needs of any
qualifying new or expanding business. The Bank provides financing to
stimulate economic development in the State for both business and
Now India's second largest bank, ICICI Bank Limited was incorporated in
1955 as the Industrial Credit and Investment Corporation of India Limited
at the initiative of the World Bank, the Government of India and
representatives of Indian industry, with the object of creating an
industrial development institution to provide medium-term and long-term
project financing for Indian businesses.
The concept of Dedicated, Project-secured Development Investment based
on, and secured by the project itself backed by continuous monitoring is
basic, and simple. It can create jobs, economic expansion and enhanced
productivity anywhere without increasing government debt.
Regional Investment Agencies can spread growth across peripheral
regions, creating jobs and providing the wherewithal for existing
companies to increase their competitiveness. And the benefits will stretch
into the future as a thriving, broadly based economy sends a positive
signal to young people providing the prospect of a challenging, well-paid
job as the sure reward of education.
In these days of hi-tech gambling, mis-reporting of assets, and
under-cover manipulation of interest rates, morality and scruples are no
longer a part of the banking tradition, now replaced by a culture of
'profit at any cost'. And as for banks' assets, government bonds, once
considered as 'gold-plated' are now themselves being downgraded.
Under the Principle of Liberty it is the responsibility of
government to ensure the proper functioning of the nation's infrastructure
services, among which banking is arguably the most significant. Regional
Investment Agencies can create jobs and industries NOW, with genuine,
repayable investment loans, avoiding the need for deficit-increasing
During the Great Depression years following 1929, Britain's Lord
Melchett, prominent industrialist and politician, stressed that banking
should be at the service of industry, rather than industry at the mercy of
the banking system.
His words are equally true today: "While banks take a short-term view
for reasons of security and liquidity, business is conducted on a long
view. We must alter our banking and economic system to suit the
necessities of industry".
The overall objective, as in other aspects of Socially Responsible Free
Enterprise, is to try and ensure through debate and a modicum of
intelligent forethought that the component factors of enterprise,
investment, and market potentialities are drawn together to minimum mutual
detriment and maximum possible advantage.
Full employment is one of the basic essentials of a civilized society,
but it will not come about by chance. There is a tremendous potential for
creativity in the world; most people want to do a useful job of work, and
to do it well. Unemployment is not our natural or preferred condition.
Once the value of money has been stabilized with Pay, Profit and Price
Evaluation, investment-directed expansion of the National Credit Base can
create full employment and prosperity, but only if it is channelled into
efficient enterprises, and guided by overall priorities.
The Regional Investment Agencies can act as a main source of economic
motive power, providing finance and subsequent ongoing supervision for
Nor is industry the only area in which investment is vital to a
Nation's total productivity and competitiveness; infrastructure and
essential services must also be considered.
The totality of a Nation's infrastructure, its roads and bridges, water
and sewage, its power supplies, telecommunications and railways, serves
not only the convenience of its citizens, it also serves commerce and
industry, and a well organized state-of-the-art infrastructure can make
its own substantial contribution to productivity.
The Regional Investment Agencies provide a method of expanding and
regulating economic activity which is totally independent of Government
and Government accounts, thereby removing the temptation to resort to
deficit spending as an impetus to economic recovery.
If the economy can be purposefully expanded to full capacity and full
employment without risk of inflation, directed into safe and productive
investments guided by nationally established priorities, and if standards
of quality and productivity can be maximized and continuously improved
throughout industry and services, the Nation's economy can become and
remain among the world's most productive and rewarding, while at the same
time satisfying the demands of Fair Exchange required under the
Principle of Liberty.
Chapter 10: GOVERNMENT AND CONSTITUTION
Liberty in Constitution - The Legislative Process - Quality,
Liberty in Constitution
When in 1689 Britain's Autocratic Monarchy was finally replaced by
Autocratic Parliament, Britons heaved a sigh of relief and have tried ever
since to make the best of it. Americans busy founding a new nation a
hundred years later looked with some suspicion on the potential power of
Government in all its branches, then tried through a system of
Constitutional checks and balances, and the Bill of Rights, to impose
disciplines on the possible excesses of Government - insofar as they could
anticipate them at the time.
In neither country today are citizens satisfied either with their
Governments, or with the degree of Constitutional discipline to which
their Governments are subject.
Since it sets the rules for Government, the Constitution must itself
stand above Government as the Supreme Law of the Land. In the United
States it holds this position, though at the apex of the Judicial rather
than the Legislative system.
In Britain the authority of the Constitution is inherently weak, and
there are several reasons for this. The British "Constitution" is
unwritten; it is endowed with no personification or effective power save
for the Monarch whose powers the Constitution itself has rendered a pure
formality; and the Constitution, such as it is, rests in the hands of
Parliament which can hardly be expected to promote discipline over its own
In the European Union, young and still trying to find its way through
the minefield of nation-members and their conflicting interests and
demands, a New Constitution for Europe was formulated, only to be rejected
by voters already distrustful of institutions and bureaucracies which
threatened their national identity through territorial expansion.
Constitution or no Constitution, Government in Britain, Europe and in
the United States, and indeed everywhere else in the world, remains as
dictatorial as ever. In particular, governments still assume that
strongest and most powerful of all rights over their citizens: the power
to tax and to spend at will, with no qualification as to the quantity of
tax taken, the uses to which it is applied, or the efficiency with which
government operations are executed.
Whatever the overall direction and the detail of individual Government
policies, there are certain basic disciplines which should apply to the
conduct of any government and it is just such disciplines which are laid
down in Constitutions. Secrecy, the purveyance of mis-information, lack of
productivity and the almost total absence of financial discipline are
features of present Governments which should be remedied, and can only be
remedied through the strengthening of the Constitution both in its
provisions and its status within the total apparatus of Government and
Constitution exerts its supreme power in a Constitutional System by
placing itself above and between the two processes of law-making and
law-enforcement, thus controlling that vital link without which each
process in itself is useless.
The essence of Constitutional Government is the separation of
Decision and Enforcement, so that each can empower the other
only through the Constitution, and only on condition that both comply with
the Constitutional requirements.
If the Constitution is to stand in reality as the Supreme Law of the
Land, it must also embody an Executive function; proposed Legislation must
be channelled through a Constitutional Executive Council, becoming Law
only after Constitutional Verification.
Government Legislation would be formulated according to the appointed
processes, but as yet would have no Force of Law. In the form of a
proposal, reached through the full observance of the relevant
Constitutional procedures, each newly formulated Law would then be passed
to the Constitutional Executive Council, where it would be verified to
ensure that its content and the procedures of its formulation are fully in
accordance with the Provisions of the Constitution.
Following Verification by the Constitutional Executive Council,
Legislative Proposals would then be passed to the Enforcement Agencies,
thus giving "Force" to "Law". But once again there must be Constitutional
Verification, for the Enforcement Agencies must also be subject to
Constitutional Provisions and must be constantly monitored to ensure that
they so comply.
It is important that Enforcement Agencies should not distort the Law in
any way, and that Enforcement Personnel should conduct themselves
correctly. It would be the duty of the Constitutional Executive Council to
monitor the Enforcement Agencies continuously in order to ensure that
their conduct complies at all times with the Provisions of the
If the Constitutional Executive Council is to be responsible for the
verification of all Legislation in terms of content and procedure of
formulation, as well as for the honesty and legality in all aspects of
Enforcement conduct, it may reasonably be suggested that the
Constitutional Executive Council is the most important body in the process
The membership of the Constitutional Executive Council is defined by
its purpose: it must consist of persons having intellectual stability,
legal training and a thorough understanding of the status and provisions
of the Constitution which it is their duty to uphold. The US Supreme Court
with its carefully selected nine Members drawn from the Judiciary provides
a good basic example.
Though the Constitutional Executive would naturally be drawn mainly
from the country in which it serves, a case can be made for inviting some
suitable candidates from other countries having broadly the same
constitutional, legal and linguistic traditions. In this way the
Constitutional Executive Council would reflect a broader, more objective
view, and international cooperation and understanding would be encouraged.
Also necessary to the proper function of Constitutional Government is
the provision of an institution and procedure for the periodic
consideration of Constitutional Revision. From time to time there will be
details of the Constitution which must be amended or withdrawn. Similarly,
new perceptions or conditions will arise which make it necessary for new
Constitutional provisions to be added.
Without adequate provision for amendment, inconsistencies are bound to
develop as the customs and expectations of civilization change.
The right of every American to "bear arms" was conceived in a
context of 18th Century People's Militias which today we barely
comprehend; the current exercise of this Constitutional "Right" has put
over 200 million guns in private ownership - one for every adult American.
The results, in terms of crime and violence, could not have been
foreseen by the Founding Fathers, and would hardly be approved by them.
This Constitutional Right is now a serious threat to public safety, yet it
cannot be withdrawn or even seriously limited owing to the "democratic"
gridlock of conflicting pressure groups.
An example of a current need for new Constitutional discipline over
Government conduct can be seen in the present absence of fiscal
constraints, without which Government can plunge itself and the nation
into apparently limitless debt.
All that is needed is that Government be required to conduct its
finances according to the same rules of fiscal propriety which the Law
demands of private citizens and corporations.
A fundamental principle of Constitution since Magna Carta is that the
Law-makers should themselves be subject to their own Laws. When Government
can conduct itself and its business in ways which would never be tolerated
in the private citizen or corporation, that is a sure indication of a
significant lack of Constitutional discipline.
The United States Supreme Court rules on points of Constitutional
Interpretation. But America's Founding Fathers left no suitable provision
for amendment of the Constitution. Since the purpose of Constitution is to
discipline the Legislature, it is clearly not appropriate to ask the
Legislature itself to amend it! A body of similar stature to the Supreme
Court must be created to fulfill this function.
The Constitution must take its true place as the Supreme Law of the
Land, laying down the procedures of, and disciplines upon every branch of
Government, and through its Executive Council position, subjecting every
proposed Law to scrutiny.
In current constitutional practice, as seen for example in the USA,
legislation as formulated by Congress is passed for formal ratification to
the President who, as Executive, "executes" the proposed legislation into
law without any requirement for constitutional verification. Thus
“unconstitutional” laws are free to leave the system and roam the land –
until some watchful citizen initiates a tedious chain court action, up
through the judicial system to the Supreme Court.
If it is to fulfill its role effectively the status of the Constitution
must be elevated to a higher position, at the apex, not of the judicial,
but of the legislative process. In this way, laws are verified for
constitutionality before being formally enacted.
The Legislative Process
The application of the Principle of Liberty to everyday Law
would be precisely defined in terms of the twin confines of
Obligation and Limitation.
The Principle of Liberty would obligate Government to
prevent any and all Infringement of Liberty by one citizen over another.
Where there is an identifiable Infringement of the Liberty of one person
by another there is an obligation for action at Law.
The Principle of Liberty would limit Government from
initiating any Law or Regulation which is not clearly and demonstrably in
defence of an identifiable Liberty from Infringement by another. Without
an identifiable Infringement of the Liberty of one person by another there
is no Injury and there can therefore be no protective Law.
The adoption of such a clearly defined Principle would affect the
process of Legislation and Government, as well as the very status and
function of Ministers and Legislators.
The Principle itself would then become the ultimate criterion of
"Right" and "Wrong" in social conduct. Legislators would become
Interpreters of the Principle, the Legislative process would be directed
not to satisfying the demands of sectional interests, but to the honest
and consistent interpretation of the Principle based on a clear
understanding of it.
The Principle also would impose a clear discipline on the resultant
Legislation itself, for the Principle of Liberty can be described
with such a high degree of accuracy that anyone having a basic
understanding or instinctive sense of liberty can comprehend it, monitor
its progress, and defend it whenever necessary.
Government secrecy and prevarication would no longer be possible;
indeed, accurate interpretation of the Principle of Liberty would
require a more open Legislative Process, which might be visualized along
the following lines:
The Legislative Process is initiated when a professional Legislator, a
Parliamentary Representative, a single individual citizen, a group of
citizens or a Special Interest Society brings to the attention of the
Legislature a suspected Injury or Infringement of Liberty, either caused
by citizen and permitted by insufficient Legislation, or caused by the
Political Administration through excessive or intrusive Legislation.
The identification of an injured party either actual or
potential is essential to initiate the process of Legislative Debate. The
purpose of Law is to prevent injury; the need for Law is occasioned by an
injury, either actual or immediately anticipated. The formulation
of Legislation which will prevent that injury either totally or as nearly
as practicably possible is the object of the Legislative Process, and its
fulfilment will conclude the Process.
In order to improve both productivity and opportunity for wider
participation, greater use may be made of Specialist Committee Hearings in
the early stages of initial filtration and opening debate.
The initial debate in Committee must involve everyone who has an
interest in the matter. Infringement of Liberty can be simple, or a very
complex issue involving several conflicting Liberties, and it is vital
that every aspect be taken into consideration. Similarly any remedy
proposed for the avoidance of a specific Infringement may itself cause new
infringements and involve other parties. It is only through the widest
possible debate and participation that the ultimate objective can be
reached: the minimization of Infringement of Liberty.
Throughout the Middle Ages those few who could read and write and
enjoyed a proficiency in basic mathematics effectively governed the
country. At the time of his trial and execution in 1649, King Charles
reiterated his belief that "the People are not fit to govern". During the
1800s the country was still ruled by the gentry, who alone were deemed to
have the education and the intelligence necessary to comprehend the
intricacies of budgets, economics and trade, and the intrigue of
Today ordinary people are as well informed as their Governments on
those issues which affect them, their land, their businesses, their
welfare and their prosperity; indeed there is much truth in the saying
that "when the People lead, the Leaders will follow", particularly in
these times when Governments seem to lack any sense of direction. And yet
Governments, perhaps in a vain attempt to conceal that very emptiness of
purpose, still appear to believe that they "know best", a myth perpetuated
by an increasing use of secrecy, mis-information and manipulated
In Britain the Prime Minister has considerable scope for arbitrary
decision; Cabinet meetings are not public, and much Legislative detail,
though often of considerable significance, is committed by Administrators
behind the scenes without reference to Parliament.
In the United States, the President flaunts the Constitution by
authorizing torture and illicit telephone-tapping with apparent disregard
both for Congress and Constitution.
Thus governments often do what is fundamentally unwise and fail to do
what is necessary while contriving to obtain the uninformed support of
Under the Principle of Liberty there is little or no latitude
for arbitrary action. The prime object of all Legislation is to maximize
Liberty by minimizing Infringement of Liberty, a discipline to which all
participants are subject and one which any alert citizen can monitor. It
is therefore important in the process of Legislation that all pertinent
facts should be assembled and publicly set out, and that all points of
view should be heard and taken into account. It may also be observed that
citizens more readily respect laws when they understand the need for them
and have observed or participated in their formulation.
There are three main groupings of participants who might be involved in
the overall Legislative Process.
Full-time professional Legislators would be constantly scanning events
and activities in order to identify possible Infringements of Liberty.
They would also continuously review existing laws on a scheduled basis to
ensure that they remain relevant. It may also be necessary to reconsider
or rephrase a particular Law resulting from a request by the Judiciary for
Elected Parliamentary Representatives would act as a bridge between
citizen and Legislature, listening to people's concerns, explaining the
Law, and bringing injustice to the attention of Legislature, Courts, or
the Constitutional Executive Council as appropriate. Citizens perceiving
themselves injured would therefore bring the matter initially to the
attention of their Parliamentary Representative.
Citizens could also contribute to the process themselves directly,
either as individuals, or perhaps more advantageously as members of
Special Interest Groups and Societies. There are literally hundreds of
Societies representing every shade of interest, opinion and expertise from
civil liberties to environment, heritage preservation and transport.
These Societies or Groups frequently represent an assemblage of
considerable expertise, of informed users or consumers, retired
professionals, and people devoted to their respective causes. The
Societies are genuinely Democratic in that they are supported by the
subscriptions of Members and are thus responsible to Members and
responsive to their needs; if they fail in their purpose they simply die
through lack of subscriptions and support. Conversely, as new issues and
new concerns develop, new Societies are formed.
Citizens can rely upon their Societies to monitor Legislative Proposals
in their specific area of interest, and to draw Members' attention to any
need for action.
Recognition of such Societies and Special Interest Groups as
participants in the Legislative Debating Process would improve
participation and could contribute constructively by bringing information
and expertise which might otherwise be excluded.
Citizens may prefer to bring a Personal Legislative Proposal or
complaint to the attention of the relevant Society for consideration and
further action if appropriate. Say for example, one finds that some public
footpaths are being altered or eliminated in the Resources Planning
process, one can contact the local Ramblers' Association, a Society which
is sympathetic to and understands the issues involved. Associations can
then use their expertise to present a case to the Legislature and exert
the necessary influence to get something done.
A citizen could of course, as now, belong to as few or as many such
Societies as he or she may wish, contributing directly to the upkeep of
the Society which in turn is responsible solely to its Members. One can
visualize Societies, as now, representing walkers, environmentalists,
economists, employees, those interested in civil liberties and in
disciplining the expenditure of the Political Administration.
It is particularly important that young people in their teens should
have a much greater opportunity to participate in the Legislative Process,
through parallel debates in schools, or through their own Societies
participating in Legislative Debates.
It is frequently said of young people by their elders that they are
irresponsible; insofar as this may in some instances be true, the simple
way to make people responsible is to give them responsibility. Young
people should have the right to participate in the framing of tomorrow's
world: it is after all, they who will have to live in it.
One particular example of concern to younger generations is that of the
growing National Debt; since this will have to be paid by future taxpayers
there would seem to be a clear case of "taxation without representation"!
A wider degree of participation in the Legislative-Interpretive
Process, however, should not be confused with the activities and influence
of the now-infamous "Political Action Committees" in the United States.
Participation would not mean promoting self-interest at the expense of
others; participation must be motivated by an honest desire to make all
pertinent facts and points of view known, so that in the end a fair and
just solution will be reached, a solution which will reflect the
Principle as accurately as circumstances permit.
The Legislative Process must also allow for "Review" of any Law at any
time, either by the Legislature or by the Constitutional Executive
Council. This may be occasioned when the practical application of a Law is
found to be difficult or ambiguous or impractical during the Judicial
The need for Judicial Review is stated among many others by the late
Mr. Justice Black, Associate Justice of the US Supreme Court: "The United
States Constitution was the first to provide a really independent
Judiciary. Moreover, as the Supreme Court held in Marbury v. Madison,
correctly, I believe, this Judiciary has the power to hold Legislative
Enactments void that are repugnant to the Constitution and the Bill of
"The Judiciary [in the United States] was made independent because it
has, I believe, the primary responsibility and duty of giving force and
effect to Constitutional Liberties and Limitations upon the Executive and
"Judges in England were not always independent and they could not hold
Parliamentary Acts void. Consequently, English Courts could not be counted
on to protect the Liberties of the People against invasion by the
[Mr. Justice Black: "One Man's Stand for
In Britain Lord Denning has long been an
eloquent supporter of the need for Judicial Review. When all Legislation
is based on and committed to a clearly defined Principle, the Law must at
all times be open to review. Its original validity may be questioned; it
may have become outdated, or in some particular set of circumstances the
Law may be inapplicable.
Under the Principle of Liberty the
Procedure for Judicial Review would provide for three distinct types of
Should a Court find that in practice a
particular Law is not well drafted, or is difficult to interpret, or
should the Court suspect that the Infringement which the Law attempts to
prevent has not been properly identified or addressed, then the Court
proceedings would be suspended and a prompt re-consideration requested
from the Legislature or if necessary the Constitutional Executive Council.
A Law may also be "returned" to the
Legislature where insufficient detail leaves it unclear in relation to the
case in hand. In some circumstances the Court may rule on the matter, thus
effectively "filling out" the existing provisions of the Law itself.
However there may be cases where the personalities and emotive issues
involved in Court make it preferable to seek guidance from the Legislature
whose deliberations can be conducted in more objective conditions.
In a case where the Law remains a valid
reflection of the Principle of Liberty for all general purposes,
but in the extra-ordinary, specific circumstances under the Court's
consideration there is no actual Infringement of Liberty, then the Court
would note the exception and dismiss the case, there being no Infringement
of Liberty to answer.
The ultimate test of the fitness of any
Law under the Principle of Liberty would be this: if I were to
disregard this Law, would I cause injury to, or the Infringement of the
Liberty of, another individual?
If there is injury, the immediate and
effective protection of Law is an obligation; but if there is no injured
party, there can be no Law.
When the sole object of the Legislative
Process is the accurate reflection of the Principle of Liberty, its
laws must always be open to Review, by the Judiciary or by any aware and
observant citizen with an instinct for the preservation of Liberty.
Under the Principle of Liberty, it
is the Principle itself which would give authority, obligation, and
limitation, to Law and to the Process of Government; the Principle becomes
the source and focal point of Law, taking precedence over Government in
all its aspects. This clear line of authority and responsibility extending
from the Principle itself, down through all branches of Government
contrasts with the current condition of near-autocratic Governmental
Government would become answerable not to
itself, not to any "Leader", not to its Members or supporters, not to
those who try to influence it with verbal pressure or money, not
specifically to majority or minority; Government in all its departments,
all its aspects and all its functions is answerable only to the
Principle of Liberty, nothing and no one else.
The ideal of Democracy is “power to
the people”. The Principle of Liberty would give power to the
people - the power of the Principle by which all Government action
or inaction can be called to account.
Quality, Productivity, and Service -
three words not normally associated with Government today!
If these ideals are to be applied
effectively, the function of Government must first be precisely defined;
we cannot measure the productivity of a service without first defining its
The current activities of Government fall
into three broad categories: Laws, Infrastructure, and Welfare.
The provision of Law is the essential
"core function" of Government. Under the Principle of Liberty,
Government would confine itself to the formulation of Law and its
Enforcement, or more specifically, those Legislative, Protective and
Constitutional Services essential to and directly related to the
protection of Liberty.
If Government is to exercise its
regulatory function without bias it cannot own or operate any
non-political services or industries, including infrastructure and
Infrastructure and Essential Services
must be operated outside Government, but with Government's strict legal
In order to make government more
efficient and accountable, and to satisfy the requirements of the
Principle, an important first step would be the separation of all
non-political Services from government. Non-political Services include
provision and maintenance of roads, schools, health, pension and welfare
services, administration of railways and any other productive or
The non-political Services, when
separated from Government, should be autonomous managerially and
financially. These Services would then become responsible for their own
management and finances, raising capital as required through the
Investment Banking System. They would no longer be subject to the
uncertainties of Government finance or to the managerial whims of
politicians; but they would become subject to strict disciplines,
reporting regularly and publicly through the medium of Total Performance
Audits specifying details of quality and productivity.
Government, now independent from these
non-political Services, would be better placed to do its proper job: that
of making sure that the Private Sector including all previously
Government-run business conducts itself responsibly, efficiently, and
Government has the duty to ensure that
business and commerce is conducted in a socially responsible manner in
accordance with the Principle, and this must apply with particular
relevance to the Nation's Essential Infrastructure Services.
But such Services must remain
managerially and financially autonomous, both for their own good, and to
ensure that Government treats them in the same way as any Private Sector
The use and apportionment of land
provides a special case where planning and coordination between
residential and commercial developments and transportation services in
essential. Nonetheless, in the case of public transportation services,
National or Regional Management would operate under its own initiative,
but subject to strict quality and productivity standards, as well as
overall planning and coordination guidelines.
Currently a major call on Government time
and finances is the cost ad administration of what may broadly be referred
to as Welfare. Under the Principle of Liberty however, the object
of government should be to alleviate the conditions which make it
necessary. The need for "Welfare" is universally recognized today, albeit
grudgingly. One reason must be the general acceptance that widespread
unemployment exists as an inevitable reality and that it is the result of
the National Economic System rather than individual idleness.
If a Nation could truly claim that there
is a rewarding job available for anyone who wants it, that the job pays a
fair wage, and that the essentials of life, particularly decent housing,
are to be bought at a fair price... we would not be so sympathetic towards
Welfare recipients. But then in those conditions, Welfare recipients would
probably be few in number.
Our present confrontationary political
and economic systems demand a measure of continuing unemployment to hold
down inflation. Under the Principle of Liberty, disputation over
pay, profits and prices would be replaced with fair and consistent
guidelines, thus providing monetary stability and removing the threat of
inflation. The Nation's Credit Flow can then be directed into productive
economic expansion to sustainable full employment.
When Government confines itself to
ensuring the correct and consistent application of the Principle of
Liberty, the need for welfare will be diminished, and Essential
Infrastructure Services will have the advantages of autonomy while
remaining subject to strict quality and productivity criteria.
And with the purpose and function of
Government clearly defined, it becomes much easier to apply strict
financial and administrative disciplines to ensure that Government fulfils
its own core functions as efficiently and as cost-effectively as possible
with continuously rising productivity.
Once Government has been brought down to
its core services, these too should be re-structured so that they are
separately identifiable, and publicly accountable for their productivity
and service. Many existing government departments and programs would
inevitably be abandoned as being non-essential, while each of those
remaining would be required to state clearly what it is doing, what it is
costing, and the extent to which it is fulfilling its stated objectives
The Principle of Liberty, applied
in Economics and Commerce as a policy of Socially Responsible Free
Enterprise would set high standards of management and customer
satisfaction, quality and productivity, performance and accounting for the
Governments today exempt themselves from
Commercial Law. If the Principle of Liberty were to be consistently
and correctly applied there could be no exceptions, not even for
Government, which would itself be subject to constitutional scrutiny in
terms of its quality and productivity.
Government is a service to its consumers
and as such should be subject to the strictest possible commercial
disciplines; its performance should be at least as good as and preferably
better than the Private Sector. Any Commercial Legislation relating to
accounting, standards, productivity or quality of Private Sector business
and commerce should immediately and automatically apply to any and all
functions of Government.
Government is not outside the Law;
Government Legislation, conduct and operations would at all times be
subject to the Principle of Liberty and to all its resultant
The process of auditing and applying the
necessary disciplines to Government should be entrusted to a specially
constituted Committee under the Constitutional Executive Council; no
institution, least of all Government, can be trusted to discipline itself.
The aim of Government should be the same
as that of any well-run Private Sector industry or service: to provide the
best possible service at the lowest possible price.
The Principle of Liberty:
that we should confine ourselves to those actions and
activities which are not detrimental or disadvantageous to others, which
do not harm or injure others, is as old as Human conscience.
We should all have the freedom to enjoy
life and improve ourselves as we choose and are able. But we should not do
so in ways which are harmful or detrimental to others; we should not seek
gain at the expense of others' loss.
The parallel concept of Government, that
it exists primarily to prevent such actions, has likewise existed in
political philosophy as expounded by reformers throughout recorded
And the ideal that Government, its
function clearly defined and limited, should exercise its duties
efficiently and at minimum cost to its customers, is a dream long
cherished by reformers and tax-payers alike.
Accurate and consistent application of
the Principle of Liberty would maximize Liberty; and with its
function clearly definable and subject to its own inherent discipline it
would do so productively and without incurring an over-burdensome tax on
This ideal was summarized by Thomas
Jefferson in his first Inaugural Address given on March 4th, 1801:
"A wise and frugal Government, which
shall restrain men from injuring one another yet leave them otherwise free
to regulate their own pursuits of industry and improvement, and which
shall not take from the mouth of labor the bread it has earned: this is
the sum of good Government necessary to complete the circle of our
The two outer lines at the base of our symbol
silver-white on the Front cover
represent two persons on a course of
The centre, in gold on the cover,
represents the Principle of
when correctly and consistently applied,
and prevents any and all actions which,
though beneficial to one, are
harmful to others.
As a result the two outer lines are deflected upwards,
respecting one another
and working together in productive
Through the correct and consistent application of
the general Liberty is maximized,
a condition in
as represented by the sunflower,
civilization can grow and