This is a really excellent book and it will probably be the most important volume on the market in Australia this year, even if it is not the most read. First published in 2005 it has fresh significance as we contemplate the state of the nation after two terms of the worst federal administration in our history. The late Ron Kitching has explained in clear and simple language, informed by wide and deep scholarship and practical experience, how the principles of Classical Liberalism can deliver peace, freedom and prosperity worldwide. It is some consolation, but not very much, to note that other nations in Europe and the US have even more need for Classical Liberalism than we do. Somebody should provide every aspiring politician in the country with a copy, certainly every LNP candidate for the next Federal election.
Ron Kitching (1929-2011) was a Queensland "boy from the bush". He became a highly successful drilling contractor in the mining industry. Starting with Ayn Rand's epic novels he became a self-taught polymath in philosophy and political economy and a member of the Mont Pelerin Society.
At the beginning he defined the Classical Liberal (liberal) "drive shaft for human progress" – secure property rights, rule of law, free markets, low tax, sound money. To which I am inclined to add a "robust moral framework" with elements such as honesty, compassion, enterprise, personal responsibility, community service, civility.
Then follows a mix of history, economics, politics and social commentary to explain how the Whigs and the Classical Liberals of the seventeenth and eighteenth centuries undermined the power of Kings and "born to rule" Tory conservatives to generate the spectacular progress of the nineteenth century. This was happening while Karl Marx sat in the British Museum and wrote that the poor would become poorer at the very time that their conditions were improving at a greater rate than any time in history before or since. Then the system was undermined by new forces of reaction and special interests, and the works of Karl Marx, aided and abetted by the disasters of wars and the Achilles heel of democracy, "the vote-buying motive", to usher in the socialism of the twentieth century which achieved bipartisan support under the Orwellian label "the welfare state" in the west after World War II.
Kitching explained how the people of Britain, including the able-bodied poor, advanced under laissez fair and the industrial revolution, to be overtaken by Australia and the US as the liberal impetus waned in Britain. Then Australia embraced tariff protection for the factory owners and central wage fixing to "protect" the workers from the win/win benefits of competition, enterprise and productivity. He did not adopt an anti-trade union position, he merely explained that the "strike threat system", imported from Britain, advances the most irresponsible unions while other workers and the community at large suffer.
The combination of tariffs and central wage fixing not only drove down the general standard of living (compared with what should have been achieved with technological progress) but it also corrupted the political system at every level. The tip of the iceberg of corruption has started to come into view in connection with some trade unions and with some ALP operators who are on display at the Independent Commission Against Corruption in NSW at present. Another type of corruption has been driven by Deep Green politics so that sensible land management and prudent fire protection have been sacrificed in the interests of pristine forests and sacred trees which trump the value of property, livestock and even the lives of people.
Kitching has written with a combination of idealism and realism. For example the options for tax reform that he contemplated, along the lines of a low flat tax on all income with no deductions, or a tax on all expenditure and no income tax at all, may seem to be utopian. But is it realistic to persist for ever with the growing volume of tax law that has accumulated, along with all the other thousands of pages of legislation and regulations that are piling up in the Regulation Nation? The first step to reform is to get a good grip on the problem and the options. Kitching has done this in fine style.
The book is clearly written with generous extracts from significant figures to provide the flavour of their contributions. John Bright on tariff protection, Hayek on the impact of von Mises' great book On Socialism when it first appeared in German in 1922, von Mises on the errors of socialism and the bureaucratic state, and the positive the function of the gold standard, Bastiat on "legal plunder" by governments, Kealey on the dysfunctional results of research driven by politics (long before the climate caper), Hutt on the downsides of trade union power.
His special people from modern times are the Austrians Ludwig von Mises and Friedrich Hayek and the Englishman William Harold Hutt. One other could be added, the Austrian/ANZAC Karl Popper who appeared in a footnote reference to The Poverty of Historicism and The Open Society and its Enemies (p 79). The reading list is most helpful and fortunately all of the work of von Mises and most of Hutt can be found on line at the Mises Institute. The magisterial biography of Mises by Hulsmann is a good start to see the Hayek and the Austrian school in context.
Hulsman bio of Mises
The Poverty of Historicism
The Open Society and its Enemies
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