Why Governments Want Your Immobility
As we saw in my previous article about the perils of a banking system which is based on land values but which is not constrained by a monetary gold standard, many things perceived “real” can melt into thin air in a flash. Perhaps we would be far better from now on using the French word for “real estate” – “immobilier“.
This term captures the essence of this asset class, as the English word does not: it is immobile, you can’t take it away with you. It immobilizes owners to various degrees, making them easy targets for taxes. The “immobile” feature of this asset class brings a better understanding why politicians love to subsidize this asset class first – realizing that, push comes to shove, they can tax it later.
After all, politicians get more power the more their population is immobilized: they can regulate them, tax and bewitch them with slogans more easily. Real estate, farming, language laws (prohibiting learning other languages – see Quebec, whose laws make it illegal for their French and immigrant population to go to English schools, and require businesses employing more than 26 people to communicate internally in French) – are all great immobilizers.
No wonder governments, since antiquity, have favored such policies, praised “immobile professions” to the sky and held “mobile professions” (trade, finance, science) suspect. Was there ever a time when importers were praised? Never mind that they would roam the world for better and cheaper products to benefit locals. No government built statues to immortalize importers.
On the other hand, they subsidized every “land-based” ideology and practice, praising and subsidizing exporters among them. After all, exporting manufacturers are married to land, depend on the local government, and are in their grasp – whereas the “cosmopolitan” scientists, traders, importers – anyone with technical knowledge, be it engineers, computer technicians or scientists – can escape them.
Moreover, when unwilling to make domestic political, regulatory and fiscal changes needed – better rely on demands from other countries to cover for the persistent domestic mistakes. That this may end up in currency wars – as we may be heading today – politicians are very good in using gobbledygook economic theories and using gullible economists to rationalize devaluations, subsidized exports, and tariffs.
Ludwig Wittgenstein, the philosopher, was right when he stated that: “Philosophy is a battle against the bewitchment of our intelligence by means of language.” Indeed, “real estate” “QE,” “bubbles” (attributed to random variations in people’s mood rather than any concrete laws and regulations), erecting statues to heroes of subsidized “immobility” (unread, unwatched, not listened to statistical “cultures” being a good example) have all “bewitched” many for centuries, though “bothered and bewildered” a few. The “spells” implied that while the hoi-polloi is subject to animal spirits (that is, random fluctuations in their moods), politicians, bureaucracies and central bankers, who never made money in their lives, are never subject to such lowly chemical imbalances. They are eternally wise: Academic fads and jargons – Keynesian prominent in this respect – cover the fact that wisdom comes only from experience, from making mistakes. When was the last time politicians, bureaucrats and central bankers admitting making them?
What are the most immobile professions, after all? Politics, local culture, government bureaucracy, law, much that is “academia” today all are, and owe their expansion over the last few decades to governments having had easy access to credit. These are the professions which often benefit during time of land bubbles, but their immobility can be a detriment during times when the largest land-based revenue-seeking entity of all, the state, becomes hungry for revenues.
They will try to cling to power and compensations, rationalizing evermore policies on the subsidized academic fads and jargons. Friedrich Heer, a great historian, wrote too that “all intellectual discussions in our time are struggles for language.” Words shape perceptions and misperceptions not only about “real estate” but about monetary, fiscal and regulatory policies as well. Take off the veils of jargons, and you suddenly see that many “emperors have no clothes.”