Why Is Rent-Seeking Legal?

Our legal system has many quirks and contradictions that defy easy explanation. It seems strange that doctors are allowed to mutilate the genitals of infant boys, yet they are not allowed to prescribe medicinal cannabis products that would save lives. This article will discuss another activity of questionable morality: rent-seeking.

Rent-seeking is an attempt to increase one’s personal wealth without creating or producing any. It is the use of resources, such as land, to extract economic benefits (known as rents) from others without making any contribution to the overall economic good.

The most common form of rent-seeking today is found in residential property. There are some 625,000 rented houses in New Zealand today, and the average weekly rent is $390 a week for small houses and $525 for larger ones. Assuming an average rent of $480 per week, rents on residential property bring in some $15,600,000,000 every year in New Zealand alone.

Rent-seeking is correctly understood to be a form of parasitism. As with other forms of parasitism, rent-seeking is a net negative for the overall health of the system. Not only does it suck money away from the productive and gift it to the unproductive, it also incentivises anti-social behaviour. Economically, it disrupts market efficiencies, limits competition and creates artificially high barriers to entry for market participants.

Despite being a form of parasitism, rent-seeking is a long and honoured tradition in New Zealand. Many a fortune has been built in this country by taking advantage of people’s need for shelter from the elements. As a previous essay here has discussed, there’s nothing as profitable as human suffering, and being exposed to the elements is one of the worst kinds of suffering.

The beauty of rent-seeking is that it carries little risk. All you need to do is to own property and the Police will keep people away from it unless those people pay you money. As long as there are men willing to enforce other people’s claims to property in exchange for a wage (and there always will be), then owning some of that property is effectively a licence to print money.

In reality, there’s little difference between a landlord charging someone rent on the threat of throwing that person out into the street, and an armed robber charging someone their wallet on the threat of stabbing them in the guts. In both cases, the power to charge a fee or levy comes from the power to cause extreme physical suffering. Both are a form of extortion.

Given the apparent net harm of trying to extract wealth from the system instead of creating it, the question has to be asked: why is rent-seeking legal?

The main reason why rent-seeking is legal is simply because the rent-seekers make the laws. It was they who, way back in the day, invented Government by paying some weak-minded arse-lickers to defend their property against outsiders (this is all that Government is). Those arse-lickers bifurcated into the Police and security services (whose prime directive is to protect and serve property owners) and the Government (whose prime directive is to organise the protection of property owners).

At the end of the day, the Government is there to manage the affairs of the rich, and they don’t care if the poor are impacted adversely. People too poor to own property don’t have a seat at the table. This is the same reason why businesses were compensated directly in the form of wage subsidies, rather than workers being given a universal basic income – the wealthy take the lion’s share, the poor get the scraps.

This arrangement has created a great deal of resentment, however. Those forced to pay rent on threat of being thrown into the street don’t feel much less resentful about it than those forced to give up their wallet on threat of being stabbed. The fact that rent-seeking is socially accepted in our culture barely softens the blow. It still feels like a robbery.

As is usually the case for such abuses of power, this resentment has built to the point where it threatens to spill over.

The Sixth Labour Government has made it illegal to evict tenants from residential property for the next three months at least. Some groups of tenants have realised that, if they collectively refused to pay rent until the end of the coronavirus crisis, they could pretty much get away with it. There’s no way to enforce an eviction during the lockdown, so anyone who refuses to pay rent from now on can get at least three months of living rent-free.

Other people and places overseas have already declared rent strikes on account of that the coronavirus has made earning their usual income, and therefore paying their usual expenses, impossible. Housing Minister Megan Woods has said “there was also an obligation on tenants not to abuse the situation,” but it’s hard to see why, other than the possible threat of being blacklisted in the future.

The only reason why property owners can get tenants to pay them rent in the first place is because they have the power to force them to on threat of eviction. If that power is taken away, there’s little reason for those who had been coerced into paying rent to continue playing ball.

Perhaps the fairest outcome would be to continue to allow the extraction of rents, but to levy a 90% tax on incomes derived from it. An outcome similar to this was discussed in a previous article here that proposed the introduction of Georgist-style taxes on rent-seeking activity.

In short, rent-seeking is legal because it always has been, and because we’ve never questioned it. We’ve never been able to, because not only did the rent-seekers control the law enforcement forces but they also controlled the apparatus of propaganda, and these combined to normalise the practice. The legitimacy of rent-seeking doesn’t survive scrutiny, and there is a very real chance that it will be as illegal as armed robbery later this century.

If you enjoyed reading this essay, you can get a compilation of the Best VJMP Essays and Articles of 2019 from Amazon for Kindle or Amazon for CreateSpace (for international readers), or TradeMe (for Kiwis). A compilation of the Best VJMP Essays and Articles of 2018 and the Best VJMP Essays and Articles of 2017 are also available.

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Cannabis Is Considered An Essential Medicine in America – But Kiwis Still Can’t Get It

With New Zealand entering “level 4” of the new Coronavirus national response system, commercial activity is being scaled back to essential services. This has led to some confusion as to what counts as an essential service. An unpalatable truth facing Kiwis is that, by the standards of several places in America, we are having an essential service denied to us.

The COVID-19 alert level is currently set to 3, out of a maximum of 4. This is similar to the American DEFCON system and refers to the current alarm level. A level 3 means that all non-essential services have been forced to close by Government decree, part of a schedule of restrictions laid out on the Government’s own COVID-19 response website.

What counts as an essential service is also listed on that website. The list covers all the skeleton services required to keep a no-frills society running: healthcare operations, food production and sales, security services, postal and courier services etc. The logic is that, despite the coronavirus risk, it would cause even more suffering if these services were stopped, so they have to be kept open.

Most countries worldwide are now moving into some kind of lockdown with movement or trading restrictions as a result of the pandemic. What’s interesting to note is that although all countries agree on the importance of, for example, social distancing, they don’t all agree on what constitutes an essential service.

Access to medicinal cannabis is not considered essential in New Zealand – the New Zealand Government considers growing medicinal cannabis to be criminal conduct. If you have one of the dozens of ailments that can be helped by cannabis, you can go fuck yourself. You’re not allowed to use it, and if you grow it yourself, you go in a cage.

In several places in America, however, medicinal cannabis is considered essential.

In Los Angeles, county officials declared medicinal cannabis dispensaries to be ‘essential services’ on the grounds that they are healthcare operations like any pharmacy. These officials understand that it is grossly immoral to deny suffering people a medicine that would help them – so immoral that, even in a time of national crisis, cannabis dispensaries need to be kept open.

It’s similar in San Francisco, where cannabis dispensaries are kept open on the grounds that cannabis is a medicine like any other, and that people’s need to access medicine during this time is the same as during any other time. The Dutch also allowed their cannabis cafes to remain open throughout the lockdown, reasoning that closing them would create additional health risks as well as empowering the criminal underworld.

Although the issue is not yet taken seriously by the majority of New Zealanders, accessing medicinal cannabis is a life or death issue for a number of people here. Studies have shown that introducing a medicinal cannabis law decreases the overall suicide rate, and by as much as 11% for men aged between 20 and 29. If one adds to this the lives saved by the application of cannabis to physical medicine, it shows that withholding it from people is causing a significant number of deaths.

It’s incredible that, in some places, the medicinal uses of cannabis are so widely accepted as to be understood by all, yet in New Zealand it’s still impossible to access it. This ongoing denial is a completely unnecessary form of sadism, and one that is entirely unjustifiable given the current state of scientific knowledge about the cannabis plant and its uses.

It’s most galling for those who currently sit in prison for an act deemed to be an “essential service” in other places. New Zealand must seem like a medieval shithole to those who are in cages right now for growing medicinal flowers, when that same act is considered an essential service in more enlightened parts of the world.

Cannabis prohibition is an act of cruelty that only continues because those with the power to change it hate cannabis users, and are indifferent to their suffering. The morally correct thing to do is to recognise that cannabis is a medicine, that people have a legitimate right to use it, and to legalise it straight away.

Vince McLeod is the author of The Case For Cannabis Law Reform, the comprehensive collection of arguments for ending cannabis prohibition.

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New Zealand Should Legalise Cannabis For The Coronavirus Lockdown

It seems inevitable now that the country will soon end up in lockdown on account of the COVID-19 pandemic. This will cause a great deal of stress not only to our society and to our economy, but also to the minds of individual Kiwis. This essay discusses a simple, easy way that the Government could help the nation avoid much of the suffering coming our way: legalise cannabis.

When the lockdown happens, people are going to be trapped inside their houses for a long time. This sudden, forced, close proximity is going to sharply increase the stress levels of a great number of them. Kiwis are an outdoors people – for us community is found on the sports fields, the tramping trails and the beaches, not inside churches or auditoriums. Being stuck inside will be highly unnatural for us.

The Playstation will help for a while – a few days at most – but that will wear thin quickly. The lockdown will lead to sharply elevated levels of boredom and stress – emotions which, if felt for a prolonged period of time, lead to chaos and destruction.

New Zealand already has a serious problem with domestic violence, mostly due to the fact that alcohol is promoted while more peaceful alternatives are suppressed. In our culture, where most lack the self-confidence to speak eloquently, bashing someone is considered an acceptable way to discipline someone misbehaving.

We can predict, sadly, that the enforced proximity created by the lockdowns will result in a sharp rise in domestic violence. Having to live on top of each other for weeks will lead to more nagging and fighting, especially when some turn to alcohol to beat the tedium. As tempers fray, fists will fly. Because children will be at home from school, they will be exposed to it all. In some cases, this will cause long-term trauma.

The Government could pre-empt a great deal of this suffering today, if they had the wit and will to legalise cannabis.

One of the foremost benefits of cannabis is that it makes boredom easier to deal with. As Doug Stanhope said: “Boredom is a disease. Drugs cure it.” Cannabis can make all kinds of dull things exciting, and can make ordinary things seem interesting. Cannabis enthusiasts have found that weed adds to the appreciation of life in much the same way that salt adds to the appreciation of a meal.

If cannabis were to be made legal today, people could make plans to use it during the lockdown. Although it will not be possible to institute retail sales on such short notice, people could take measures to acquire it from those who already have it, who could themselves be temporarily authorised to sell it while a proper recreational system was being set up (although not to people under 18).

Such a move would ease a great deal of the extraordinary stresses to which Kiwis will be subjected in coming months.

The Government is going to have to deal with the prospect of civil unrest over the next few months. There has already been looting in London, if limited, as a result of the increased tensions. Although the nation is pulling in behind the Government now, this is only because the state of alarm is keeping people in line. As the lockdown wears on, people’s dissatisfaction will change their sentiments.

Legalising cannabis would make this much easier. It would provide relief to the great number of New Zealanders who will be suffering heightened stress and anxiety from the lockdown and from its economic consequences. It would provide relaxation to those disturbed by the disruption to normal life. Not least of all, it would allow for different patterns of thinking in these times of panic and despair.

Jacinda Ardern has already proven that the country is willing to accept extraordinary measures in this time of crisis. We have already accepted a shutdown of the national borders, despite the fact that this measure condemns to bankruptcy a proportion of our tourism, transport and hospitality operators. The general mood is akin to a siege mindset. It’s the perfect time to take bold measures.

A majority of New Zealanders have already accepted that legal cannabis is inevitable. The only holdouts are clinging to prohibition out of stubbornness, spite or malice. The COVID-19 lockdown offers the perfect opportunity to bulldoze through these last recalcitrants and to repeal cannabis prohibition.

Over and above all this, repealing cannabis prohibition would free up some $400,000,000 of Government spending and tens of thousands of Police man hours that is currently wasted every year on enforcing cannabis prohibition. Both of those things will be in desperate short supply over the coming months – time to acknowledge that they’re not well spent persecuting weed smokers.

If the Sixth Labour Government thought intelligently about it, they would understand that the COVID-19 epidemic had temporarily slapped the nation out of its usual slumber, and they would use this opportunity to do things that had previously been made impossible by obstinacy and cowardice. The Cannabis Control Bill that is scheduled to be put to a referendum this September could simply be passed into law by majority vote.

Vince McLeod is the author of The Case For Cannabis Law Reform, the comprehensive collection of arguments for ending cannabis prohibition.

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How A Coronavirus Pandemic Could Win Jacinda Ardern The Election

This September’s election promises to be very close. Opinion polls suggest that either of a National-ACT or Labour-New Zealand First-Greens coalition could easily take power in the aftermath. The actual winner will be determined by a number of factors. One of those factors, as this essay will discuss, is the effect of COVID-19 on the demographic makeup of the nation.

One striking feature of this particular form of coronavirus is its death rate among old people. The death rate for people aged 80 and over who contract it is believed to be over 14%. For people aged between 70 and 79 it appears to be 8.0%, and 3.6% for people aged between 60 and 69. Corona-Chan is the Scourge of the Aged.

The death rate among young people, by contrast, is extremely low. No-one aged under 10 is known to have died of COVID-19 yet, and the death rate for those under 40 appears to be no more than 0.2%, i.e. barely different to regular bouts of influenza. Corona-Chan is merciful upon the young.

This great differential in danger across age brackets may have electoral consequences.

As Dan McGlashan showed in Understanding New Zealand, there are very strong correlations between being old and voting Conservative or National. In 2017, the correlation between being aged 65+ and voting Conservative was 0.39, and between being aged 65+ and voting National it was 0.62. At the other end of the scale, the correlation between being aged 20-29 and voting Labour in 2017 was 0.34, and with voting Greens it was 0.60.

0.62 is a strong enough correlation to suggest that the vast majority of people over 65 will vote National, and much of the remainder will vote Conservative. Meanwhile, the correlation of -0.35 between being aged 20-29 and voting National in 2017 tells us that few young people will vote for them in September.

Put these two things together, and it becomes apparent that COVID-19 is likely to kill off a significant proportion of National and Conservative voters.

There were over 711,000 people in New Zealand aged 65 or over at the end of 2016. It might be closer to 800,000 by now. If COVID-19 kills off 10% of people over 65 before September 19, that will approach 80,000 deaths, and if 75% of those people were National or Conservative voters, that suggests that they could well lose 60,000 voters – 20,000 more than Labour, Greens or New Zealand First would lose.

At the 2017 General Election, National, ACT and Conservatives got 1,171,403 votes between them out of a total of 2,591,896, a proportion of 45.2%. If they would lose 60,000 voters from coronavirus deaths, as per the scenario outlined in the above paragraph, they would end up with 1,111,403 votes out of a total of 2,511,896 – a proportion of 44.2%.

A loss of one percent might not sound like much, but the effect of COVID-19 in suppressing right-wing voters is not limited to deaths.

If there are 60,000 deaths among National and Conservative voters, there will be at least this many incapacitated by the illness. The overseas experience has shows that COVID-19 often means a few weeks confined to an artificial respirator. If the pandemic is at or near its peak in New Zealand at the time of the election, there could be a large number of old people unable to vote because coronavirus has left them physically incapable of doing so.

A further factor is that some old people might decide to stay away from polling booths on Election Day out of the fear of contracting coronavirus. As COVID-19’s greater threat to the elderly is widely known by now, a significant number of those elderly might be persuaded to stay away from the polling booths altogether. A majority of the population will pass through the nation’s polling booths on September 19, so standing in line at one for half an hour is asking for trouble.

Adding together deaths, incapacitations and discouragements, the right wing appears likely to lose several tens of thousands of voters before September 19.

All of this is moot if Jacinda Ardern suspends the election. There is presently no hard indication that she is prepared to do this, but mayoral elections due for May have already been suspended for 12 months in London, and Ardern must have felt the temptation. New Zealand has already been in chimpout mode for the past year and this coronavirus pandemic has made it three times worse.

Assuming the election goes ahead as planned though, there is a small but realistic chance that what would have been a National-ACT victory is transformed into a loss by the effects of COVID-19. The balance is so fine that a nudge the size of a coronavirus pandemic could tip it over.

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