Who owns the government and its assets?

  • Posted on: 22 December 2012
  • By: Gene Balfour

The defense of property rights is at the core of all things libertarian.

Most people would agree that they own their own body, mind and soul – these can be considered their Personal Property. Most would also agree that they own their own productive capacity - the ability to work and create new things from there personal efforts- this would also fall under the category of Personal Property. Furthermore, if someone freely exchanges his or her productive capacity for money, this becomes Personal Property too. Finally, if this money was used to buy a stake in a business in the form of bond or equity purchases, this stake becomes a Personal Property asset.  

At the enterprise level, most people would agree that all stakeholders of a business enterprise collectively own the enterprise and its assets in the proportion defined by each stakeholder’s ‘stake’. These assets would include: retained earnings; capital investments such as buildings, equipment, etc; the goods and services produced for which they are paid by willing customers; the company brand or ‘reputation’ earned through investments in sales, marketing, product quality and customer service; the organizational structure and individual jobs that have been shaped to meet business promotion and production goals; and the employment contracts that have been negotiated with employees to fulfill the requirements of these jobs.

 Now that we have described “property” ownership at the “individual: and private “enterprise level”, how do we apply this analysis to the question… “Who owns the government and its assets?”

 The government, and its assets,  is clearly not owned by individuals in the same way that they own their body, mind, soul or acquired material assets. It is not owned by shareholders in the same way that people purchase the equities or bonds of a Corporation.

 Another member of the Ontario Libertarian Party stated to me recently that tax receipts, when collected by government, immediately become assets of the state for which the individual taxpayer can no longer make claim for their personal needs. However, the question still remains "Who owns these assets or any government property? "

 The answer to this question will likely be framed in legal terms - something along the lines that " the government was created by the collective will of the people to formulate a legal entity which can be used to divert a portion of the productive output of all citizens to purposes that will serve the 'greater good’ of the nation…"; or something to this effect. However, the question will still remain "Who owns this legal entity?"

So, why is this question important? After all, each Canadian has the ability to provide direction to this legal entity with their vote. Presumably, their vote is sufficient to influence the government to deploy these assets in their preferred manner. Hence, our "democracy" seems to be working for Canadians, does it not?

 Allow me to use a simple parody to portray our democracy in action.

Consider for a moment a hypothetical Canadian family with 5 members. Let’s call them the Rich family.

 Mr. Rich is the breadwinner and earns $250,000 a year. Mrs. Rich, who stays home to care for their 3 children,  has control of the family budget. Mrs. Rich, however, has a problem – to “keep up appearances” in her community, she has been secretly using readily-available and cheap credit to spend well beyond the family budget.

 Some time ago, Earnest Rich, the eldest son, learned his mother's secret and promised not to tell father in exchange for “perks”.  Mrs. Rich reluctantly complied.  Under her mismanagement, the family’s real financial assets have evaporated, the family debt continues to pile up as she endures a painfully guiltily conscience over shortchanging her other 2 children and jeopardizing family security.

 Mr. Rich has a secret of his own. Using the personal savings of people who he has convinced to trust him, he operates an exclusive investment business  which features “unbelievable” investment returns for ‘a privileged group of select investors’.  For many of these people, the investments made with Mr. Rich represent a significant share of their total financial assets. Unknown to any of them, however, Mr. Rich’s  business is a Ponzi scheme  - a ticking time bomb that will detonate some day and wipe out much of the life savings of everyone including his own family.

 There are many similarities to Ontario politics and government in this hypothetical scenario.  

 Like politicians, Mr. Rich promises a better life to his constituents using other peoples’ money while boosting his public image and enriching himself in the process. Mrs. Rich, who claims to love her children equally, has succumbed to “special interest ” pressures in the form of a serious personal threat by a selfish, entitled family member. To keep up appearances as well as to continue to “buy” the support of her “partner in crime”, she digs a deeper financial hole which will surely become a real financial burden for the entire family. Meanwhile, Mr. Rich projects himself as a trustworthy and successful member of the community who makes promises he cannot possibly keep.  

 And, of course, it is all a sham.

 In the real world, the price to be paid by the Rich family for its sins are lessons already learned by others. Bernie Madoff, for example, has learned that, while telling big lies can have big pay-offs, the downside is equally big. Ultimately, illegal ponzi schemes can't go on forever and the ultimate price to pay is personal freedom.

 Greek citizens are learning another painful lesson - that there really is no “free lunch” and that they cannot live beyond their means forever.  

 In a nutshell, this story espouses a simple truth:  only actual Property  owners will act in their own best interests to manage and invest their assets responsibly. This too is a core tenant of Libertarianism.

 So I ask you one more time....who owns the government and its assets?