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Playing Favourites

December 20th, 2012 by Viv

Viv Forbes
Written December 1997.

Justice should not be influenced by the status, size, wealth, nationality, age, religion, political belief or gender of those who seek it. This is why the universal symbol of justice comprises the scales, for impartially weighing the evidence, the sword, for swift punishment of the guilty, and the blindfold, to eliminate bias, favouritism or nepotism in the judge.

Democracy, however, causes vote-seeking politicians to play favourites for electoral support. Every party identifies a constituency and sets about buying their votes with a combination of bribes for the favourites and bashings for their enemies.

Thus the Nationals like to be seen bribing family farmers, while bashing the banks. Liberals bribe business while bashing unions. Labor tries to woo the workers, particularly public servants and unionists, while being seen to bash bosses, particularly if they are big, rich, or foreign corporations.

Apart from these permanent political perversions of justice, any other noisy minority that emerges (such as the environment or the aboriginal industry) will be bribed by all politicians, and their unloved enemies and victims (such as pastoral and mining companies) can be bashed with impunity.

In the process, some untouchables arise such as “the battlers”, small business, and the health and education industries. No politician dares to be seen to harm these sacred cows, no matter how outrageous their demands for discriminatory legislation or government handouts.

Government, however, is a zero sum game. Bribes and favours can only be delivered at the expense of other groups in the community. Every bribe requires a tax to fund it; every favourable regulation generates its own red tape victim.

However, to achieve world’s best practice in vote gathering, politicians must ensure that no voter can be seen to be disadvantaged by the business of playing favourites. The perfect politician will bribe the most numerous voting constituencies (employees and tax consumers) and bash those with few or no votes (banks, mining companies, foreign investors and business magnates).

A Martian listening to election speeches would conclude there are great virtues in being destitute, sick, dependent or teetering on bankruptcy. What rot. Everyone with half a brain wants to be rich, healthy, independent and associated with powerful wealthy growing businesses.

Labor and Liberal rhetoric agree on only one thing – small business must appear to be mollycoddled. Lib-Lab politicians compete for the small business vote by seeing who can deliver the biggest subsidy, the freest advice or the most discriminatory legislation to the Mom and Pop firm. So widespread is this corrupt practice that there is little incentive for the struggling small business to become a successful big business. In fact, those on the upper margin of “small” business are forced to find ways to stay in the favoured category. Again we find that government welfare creates paupers – the more the subsidies the greater the incentive to become and remain eligible for them.

Justice in business is being destroyed by all this bribing and bashing.

The worst and most insidious result is the gradual destruction of the two fundamentals that underpin all honest business activity in a free society – protection of property rights and the sanctity of contracts.

A good example of the destruction of our legal heritage is the widely supported and badly named “Fair Trading Legislation”.

The only “fair” trade is one that occurs as the result of an agreement or contract between two or more willing parties. Justice says “Do not rob, lie, cheat or break your promises”, and it relies on the principle of “No exceptions”. The Ten Commandments does not have a fine print footnote which says “Should someone complain that one of the above commandments has been broken by a wealthy Jewish merchant, the law will be ruthlessly enforced, but consumers and small local traders are exempt”.

Peter Reith’s foolish “New Deal, fair deal” legislation, will undermine the law of contract, multiply business uncertainty and increase the risks for anyone who deals with “small business”. The only long term beneficiaries will be the officials appointed to cushy jobs in the Small Business Bureau of the ACCC, and the legal industry.

The lawyers are rubbing their hands with glee. In future, before anyone signs a contract with a “small” business, he will need a watertight legal contract which could not be construed as “unconscionable” by any “reasonable” person. And every “small” business which finds a deal less profitable than they expected, will employ their legal hounds to sniff out a loop-hole under which they can blackmail or sue the nearest deep pocket. Those threatened will need their own legal defenders.

We will even need a legal adviser to decide what is a “small” business. Maybe we should consider the Nazi solution to the problem of identifying Jews – the law should provide that all proprietors defined by law as “small” should have a big red “S” embroidered prominently on their shirt front. Wicked big businesses, banks and consumers can then avoid such high risk associates and deal only with those who can still be sued if they breach contracts.

The real growth industry in small business is the provision of “free” advice by a plethora of government advisers. Every state and the commonwealth now has a ministry, department or bureau devoted to bleating about and advising small business. Most of this advice is worth what it costs the recipients. And most small businesses would run a mile from government “help” unless it is a “no strings” cash handout. Noticing this, the Queensland government invented a new way to bribe small business – offer a subsidy of $1,000 to any small business which uses an accountant to prepare a business plan. (This definitely purchased the votes of the accountants. I wonder if two one-man accounting businesses can each get $1,000 from the government to prepare a business plan for the other?)

Politicians seem to forget that the provision of advice to business is itself an important small business activity which has been largely destroyed by the “unconscionable” trading practices of government departments who use predatory pricing, dumping of cheap services and price discrimination to destroy their small business competitors. Every country town could support a couple of small businesses providing agricultural, planning or computing advice to farmers if only they could get rid of the unfair competition from the hordes of salaried, tertiary-educated government advisers drawing travel allowances to get a free late model air conditioned car for an occasional trip to a country seminar or field day.

This is not to say that government cannot help small business. There is much they can and should do.

Firstly, arrogant local government should repeal all rules that make it difficult for cottage businesses to get started. There should be laws to prevent any business from causing annoyance to their neighbours with noise, smoke, light or pollution of air or water leaving the property. These laws should apply to business activities, private parties or family activities – the same rules for all. All other laws which prohibit, regulate or licence cottage industries should be repealed.

Secondly, all laws empowering government busy-bodies to force people to act as unpaid collectors of information, taxes or statistics for the government should be abolished.

Thirdly, all levels of government should repeal all laws which penalise businesses which grow in size, profit or employment. Small businesses should be free to grow as big as they desire as long as they do not breach contracts, or engage in theft, fraud or deception. All special laws for particular industries, certain businesses or favoured nationalities should be abolished.

Fourthly, there should be a mass repeal of all special taxes, licences, regulations and permits imposed on all business. There should be general non-discriminatory laws and taxes for all industry and no playing favourites.

Bribery and bashing may be good for short term vote buying and do make good news for amoral journalists, but they do not stand the test for good legislation: “Good laws are those that will benefit all people in the long term, not those showering benefits on a minority or for a short term”.

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