Monday, 17 August 2009

Dealing with a future Morakot without the politics

Sirs,

Much criticism has been published in your pages of the Ma administration’s response to the disaster wrought upon southern Taiwan by Morakot. Naturally, much of this criticism has drawn attention to the implication that Taiwan’s central ideological dispute, which roughly parallels a north-south geographical divide, was a dispositional factor in determining the nature of the government’s response to Morakot.

I do not dismiss this view, but I would urge the people of Taiwan not to allow their resulting rancour to be transformed into “political capital” by the opposition movement. Political point scoring is a potentially fatal distraction from a rational attempt to address the practical problem of how best to manage this sort of disaster in the future. It is with respect to this problem that I should like to make some observations together with a suggestion for improvement.

The essential problem with the organisation of the disaster response has been the fact that resources are under centralised beaurocratic control. Difficulties in resource allocation and communication channels are precisely what one must expect from the inherently inefficient and blundering nature of government, quite irrespective of any ideological tension. Even if Morakot had befallen Taiwan during the last DPP administration, such problems would still have existed and that is because they are the natural consequences of trying to solve the problem of resource allocation by State beaurocracy. Who happens to be in charge of the beaurocracy is of far less importance than the removal of the beaurocracy itself.

A potentially better way of managing the impact of such disasters in the future is to replace the State beaurocracy’s control over allocating resources such as trucks, helicopters, search and rescue teams, food, water and medical supplies, with a private insurance model. Why not allow the citizens of each county to voluntarily fund a privately run insurance plan – not to replace the value of damaged property in cash terms – but to provide the necessary resources for disaster management and to take responsibility for the direction and management of this response?

This solution – the private insurance model – has several advantages over the current system. First, it allows for the development of much more finely honed communication channels and logistical organisation systems than does the current system of the military, central government and county governments all just shouting past each other. Second, because such an insurance model would have to emerge from the private sector, there would likely be structural incentives for the continuous improvement of logistical, communication and general organisational efficiency due to the presence of market competition – say, between insurers operating in different counties for example. Third, there could be no party political fallout from any future disaster with the resulting implication for rising political tensions across the island.

In short, a private insurance model could be a much more constructive way forward in respect of preparing for and dealing with such disasters as Morakot in the future.

(Sent: August 17th 2009. Published in the Taipei Times: Wednesday August 19th 2009)

Thursday, 13 August 2009

Reductions In Public Spending Aren't Enough

Sir

With respect to Annette Lu’s comments reported yesterday (08/10/2009) concerning the current KMT administration’s efforts to publicise the benefits of the economic cooperation framework agreement, I should like to add a few of my own.

I am in agreement with her on the importance of the lack of FTA negotiations with countries other than China. Taiwan’s continued survival as a civilized nation depends on international trade – the alternative is a descent into the barbarity of “cool” leftyism.

Yet the contingent factor here lies not with the actions of a government – but with their inaction, and more specifically incapacity for action. The point about an FTA is that it is an agreement between the governments of two countries NOT to act, or (more accurately) to act less.

And that is the essence of the point I wish to draw attention to. An alternative strategy to securing Taiwan’s future as an independent free-trading nation is to reduce the size and scope of government power.

In some respects Taiwan is already well-placed to continue to cultivate a culture of flowering entrepreneurship and weeding out of government meddling with the choices of its’ individual citizens.

Currently, government spending is approximately 18.8% of GDP (according to the Heritage Foundation), but this figure could and should be much reduced. The danger for the future is not that the government’s policies of tax and spend (or borrow and spend, or inflate and spend) will not be reduced – they will have to be as a simple matter of political survival – but that cuts in services will not be accompanied by cuts in government power.

Although the government will eventually need to reduce public spending, it will do so without relinquishing its’ grip over such crucial markets as education and healthcare. The services will be cut, but the beaurocracy, taxes, subsidies and regulations will remain.

It is therefore all the more necessary to call for these markets in particular to be liberated from all government involvement forthwith. It would be an enduring and contemptible irony upon the soul of each and every Taiwanese man and woman in the decade to come to have remembered staring down the tyrannical threat of Beijing whilst turning a blind eye to the consolidation of political power within Taipei.

The fight for individual freedom must be taken to all tyrants – not just those far-away ones in Beijing.

Sincerely,

Michael Fagan

(Sent: Monday August 10th 2009. Unpublished by the Taipei Times).

False Premises On Trade Agreements

Sir,

In the current public maelstrom over the ECFA there are two frequently reappearing sinkholes into which an opposition of any value risks disappearing. The first is that the ECFA is a free-trade agreement: it is no such thing. The second is that it should be rejected in a referendum as constituting a prelude to a de-facto Chinese annexation of Taiwan.

The ECFA is not a free trade agreement. It is a commitment by two governments to fashioning a series of piecemeal trade regulation agreements. There are two important implications here. First, in seeking to tie up the regulation of trade into a series of small agreements rather than establishing a general prohibition on tarriffs, the hope is that such regulatory agreements – and the indirect political power over Taiwan’s economy that they create – will be more time-consuming and difficult to undo by any future Taiwanese government. It is a smart play, although thoroughly reprehensible. Second, in mistakenly characterising the ECFA as some form of bastardised free-trade agreement, its’ opponents risk further public discrediting of the one political arrangement which could actually raise living standards whilst not violating the principle of the sovereign and free individual human being – free trade.

A rejection of the ECFA in a referendum begs the question of what else to do instead. Whatever its’ faults, the ECFA is at least one answer to the very real question of how to ensure Taiwan’s continued position as an export economy in the future. To sit around on the island putting up protectionist fences against certain Chinese and South East Asian imports would be even worse since it would invite retaliatory measures by those governments against Taiwan. A campaign to establish actual FTAs with China and other countries in the region would be far better, although somewhat fanciful since it is politically unpallatable to socialists and democrats everywhere.

What is missing in order to create real hope for Taiwan as a country of rich and free people is the clear recognition of government, of whatever stripe, as an immoral and dangerous impediment to individual freedom and prosperity and the courage to fight for this against the odds.

Yours sincerely,

Michael Fagan

(Sent: Thursday August 6th 2009. Published in the Taipei Times: Monday August 10th 2009)

Contra State "Education"

Sir

In response to the piece “Education Never Free From Politics” by Tsai Bih-hwang, translated by Drew Cameron and appearing in the 08/04/2009 edition of the Taipei Times, I have a suggestion to make.

Tsai Bih-hwang warns of the legislature applying the Act Governing the Administrative Impartiality of Public Officials to teachers and researchers at public schools and universities. According to Tsai, such action is misguided and that “responsible teachers should not avoid discussing politics in relevant classes...”. Tsai goes on to point to the use of education as a political tool and to convincingly state the naivety of demanding a politically neutral education environment.

However, Tsai does not follow up those views with the necessary political implication: the education industry must be liberated from the interest of the State. That means an end not merely to all State mandated curricula requirements, but also to all government regulation of teachers and research staff and most importantly, an end to all State funding of schools, universities and research institutes. In short, Tsai should join me in stating the case for freedom to reign in the markets for education and research.

With a free-market in education, institutions could compete with one another for customers on terms by no means limited to just prices or average exam results. Political outlook might be one such ground of competition, with perhaps the largest market reserved for those institutions promising a defined and published “neutral” political outlook. Teachers who had a problem with that would be free to seek employment elsewhere. If right-wing conservative Christians wanted to set up a school they could. If left-wing Marxist socialists wanted to set up a University, they could. Somehow I doubt that either would survive in the market place for very long cut off from all government support.

One common lamentation against a free-market in education is the “what would happen to the poor?” question. Well the answer is threefold: first, they would no longer be cheated out of their savings by institutions controlled by government regulation rather than the consumer demand to provide value for money. Second, since schools and universities would be free to decide their own pricing and admissions policy, then it would be entirely possible for them to admit quotas of students from poor families at reduced prices, or perhaps even free of charge. Third, a free-market in education would almost certainly result in fewer Univerisites and over time, a transformation in the relative importance of a candidate’s formal education for employers vis-a-vis hiring decisions. Other, better value-for-money forms of vouching for the quality of a candidate would take their place, and thus the poor would not be threatened by joblessness merely on account of not having attended a University.

Taiwanese legislators are wrong (and in any case disingenuous) to speak of the “problem” of seperating politics from education. The real problem is getting them – the bullies of state-enforced law – out of the market playground.

Yours sincerely,

Michael Fagan.

(Sent: Tuesday August 4th 2009. Unpublished by the Taipei Times)

World Games Nonsense Part 3

Sir

The owners of a newspaper are free to voice their own opinions in that newspaper in the form of an editorial line framing their interpretation of the events of the day. Readers may agree or disagree with this line, but what all readers would expect from a newspaper is an unswerving adherence to the facts. To find out the truth of any particular matter – and further – to refuse column inches to any statements which are contradictory to the facts.

In this light it is regrettable that your publication continued to give column inches last week to the dubious claim that, as Lu I-Ming put it (07/28/2009): “The Games... made Taiwan a focus of worldwide attention” and that as there was “substantial coverage by international media... the Games brought international recognition for Taiwan.”

As I challenged in my earlier letter (07/27/2009) where are the facts to support this claim? Where are the figures for worldwide TV audiences? TV contracts? Countries in which the World Games were televised?

What about newspapers? In the USA, there was a minor article about Kaohsiung’s new stadium, in the Architecture Review section of the New York Times on July 15th. The word “Taiwan” rather than “ROC” or “Chinese Taipei” was used: once. In the United Kingdom, there was no mention at all of the 2009 World Games in either the Telegraph or the Times (the two most popular broadsheets). In Germany, Der Spiegel contained not one mention of the 2009 World Games, and in France, Le Monde likewise had nothing at all to say about Taiwan’s hosting of the 2009 World Games.

So are DPP supporters (because let’s face it, the World Games was nothing more than a bit of razzamatazz for the Taiwanese nationalist movement), willing to actually lie both to themselves and to the people of Taiwan?

Apparently so – consider the response to my letter by one Charles Hong: “But Fagan should accept the fact that the World Games raised Taiwan’s international profile.” To which I can only reply – where are the FACTS that support this contention? Are they to be found in my dog-eared copy of “1984” perhaps?

It is high time that the people of Taiwan recognize the fact that their country IS known as “Taiwan” throughout the world – regardless of Beijing’s newspeak efforts – because of the Taiwanese people’s history of international trade.

If members of Taiwan’s political class and their supporters are willing to tell such barefaced lies to the people of Taiwan – and lies that are easily shown to be such – then what else are they capable of?

The ONLY thing that can “raise Taiwan’s international profile” is continuing and expanding international trade. It is of vital importance to civilized life on this island that Taiwanese people fight to free international trade to and from Taiwan both from the manipulation of political forces in Beijing AND Taipei.

Yours sincerely,

Michael Fagan.

(Sent: Saturday August 1st 2009. Published by the Taipei Times: Monday August 3rd 2009)

World Games Nonsense Part 2

Sir,

The justification for Kaohsiung hosting the 2009 World Games was that it would “raise the international profile” of Taiwan and also of the city of Kaohsiung.

I have no doubt that this claim would fit well with Taiwanese people who often labour under the delusion that their country is largely unknown outside of the Pacific Rim.

Yet the claim that the 2009 World Games would “raise the international profile” of Taiwan is entirely disingenuous. Taiwan is known to vast numbers of people all around the world who have any connection to the global consumer electronics industry. If anything, Taiwan would make the World Games world famous – not the other way round!

A simple Google search for “TV contracts World Games” returns a first page of ten results linking to baseball, superbikes and soccer. No mention of the World Games. No mention of Taiwan. No mention of Kaohsiung.

A Google search for “TV audience World Games” returns one result linking to a piece in the Hong Kong edition of the China Daily (last updated: 2009-07-23) in which the reader learns that although there are “growing numbers of television channels offering coverage of the games” according to one Games official, no estimates are given for international television audiences nor are any details of TV contract size given. One possible implication is that these figures are so small that they are dwarfed both by the number of ticket sales which we learn are around the 200,000 mark, and the domestic television audience for the opening ceremony, which apparently drew 5,000,000 in a country of 23,000,000 people.

The other Google results for “TV audience World Games” link to rugby, soccer, badminton and chess competitions.

Whilst I have no complaint against athletes participating in their chosen sports or against people paying to watch them, I do object to the fact that it was even partially tax-payer funded (KMT shenanigans notwithstanding), and to the outrageous claim that the World Games would “raise the international profile” of Taiwan. The falsity of that claim surely cannot be denied by anyone, irrespective of political affiliation.

It is to your shame as “professional journalists” that your publication continues to ignore this obviously uncomfortable fact.

In expectation of being ignored,
Yours.

Michael Fagan

(Sent: Saturday 25th July 2009. Published by the Taipei Times: Monday July 27th 2009)

World Games Nonsense Part 1

Sir,

The launch of the 2009 World Games in Kaohsiung last week did not represent the “pushing of Kaohsiung toward the whole world and allows this city to be open to the whole world...” as the urban development section of Kaohsiung City Government’s websites clumsily heralds it. That claim is as valid as 1 + 1 = 11, less the clarity of expression.

What would actually stand some chance of lifting awareness of Taiwan and Kaohsiung City among people in other countries would be participation in a major football tournament such as the World Cup. Association football (‘soccer’ in American parlance) is by far and away the most popular sport across the world, hands down, no contest. Baseball and basketball – the most popular sports in Taiwan – are hardly worthy of the adjective ‘popular’ outside of North America and Japan. Yet even these sports easily trump those played in the Olympic Games in terms of world popularity. So to claim that the sports played in the little known ‘World Games’ (Korfball, anyone?) would ‘open Kaohsiung to the world’ is manifestly ridiculous. Only a complete fool could utter such word-salad whilst keeping a straight face.

It does not follow from this observation however, that the government should therefore either fund through taxation or otherwise ‘encourage’ the development of football in Taiwan (or even baseball or basketball). The other problem with the World Games is the utter arrogance in allowing it to be funded to any degree at all by general taxation.

I, and a great many other reluctant taxpayers in Taiwan, have not one iota of interest in these ‘World Games’ and yet we were forced to pay for them. Why should any one person be forced to pay for the entertainment of another? The claim that it will ‘allow’ Kaohsiung to be ‘open’ to the world (if we excuse for a moment the poverty of expression for a lack of English teachers) simply will not do because it is just so obviously lame.

You people at the Taipei Times and in and around the DPP worry so much about China because you don’t want the ‘freedom and sovereignty’ of Taiwan to be compromised? Well I am taking it upon myself to say that
it is the freedom and sovereignty of the individual that matters – not the freedom and sovereignty of the government to do whatever it likes to the people under it. What the Kaohisung 2009 World Games really represents is nothing but the principle of servitude and the facts of sporting and political obscurity.

Yours sincerely,

Michael Fagan

(Sent: Saturday July 18th 2009. Unpublished by the Taipei Times)

On The Inevitability & Necessity Of "Prejudice"

Sir,

The public furore this past week over the issue of ‘hate speech’ following comments made on a blog by diplomat Kuo Kuan Ying, has been rather unsatisfactory.

Now I in no way condone the remarks of Kuo Kuan Ying, however prejudice per se is not always the social evil it is frequently and wrongly portrayed to be. Prejudice is a necessary aspect of everyday thinking and acting without which risk-management (and with it therefore, personal independence) would become impossible. Many women, for example, are prejudiced against jogging in poorly lit parks at night. Some people are prejudiced against taking a ride in a taxi, given that there are no rear seat belts and that driving standards in Taiwan are poor. However, these prejudices have a rational basis in the known facts of reality. To publicly reject prejudice is to publicly reject the rationality of everyday life.

Second, the notion that all people are born equal and should therefore respect one another completely disregards the fact that all people do not remain equal and that some commit themselves to crimes – to take but one example. Am I bound to respect mass-murderers, or serial killers, or rapists or petty thieves or paedophiles? Of course not! To do so would be to destroy the very notion of respect itself. Respect – like love – can only be earned by action aimed at realising certain values shared between two or more people. This is not a trivial playing with semantics – words denote concepts and public misuse of them is an offense against the human capacity for reason.

Third, it is not respect but the matter of civility of tone and tolerance in people’s dealings with one another that is important to the wider context of political freedom of speech. I may tolerate one who holds and expresses views different from mine provided he extends the same tolerance to me – but that does not imply that I owe him respect or that he owes me any respect. Thus both he and I ought to be free to express our valuations and prejudices against one another as much as we jolly well like. In a democratic society however, there is a peculiar problem with that. Rather than resolving conflicts of value by reason, trade and peaceful social cooperation, the mechanism of majoritarian rule, the essential feature of democracy, only works because there are prejudices and conflicts of value. A democratic society does not resolve conflicts of value between people or groups of people – it merely contains them in a pressurised form between election cycles, with each political coalition longing for the chance to impose their values and prejudices on all the others. Thus, prejudice and conflicts of value – whether rational or irrational – are vital to the life of a democracy, and that is a terrible corrosive acid to a civilized life of reason, trade and peaceful social cooperation.

Yours sincerely,

Michael Fagan

(Sent: Sunday March 29th. Published in the Taipei Times: Wednesday April 1st 2009)

Contra State Sponsored Central Banking

Sir,

The articles this week by Crystal Hsu and Joyce Huang on the interest rate bill making its’ way through the legislature are commendable for not marginalising the objections to this irresponsible piece of legislation.

I sincerely hope that the free-market side of such political conflicts will continue to feature in the reporting of Ms Hsu and Ms Huang.

Yet it simply isn’t enough.

The current crisis concerns more than merely credit. It is a crisis of politicial economy resulting from the expansion of the State into more and more areas of society during the 20th Century. Monetary policy and the establishment of central banks have been at the centre of this, and it is therefore vitally important that the argument is put for their complete abolition.

Without a central bank, Taiwan would be in a unique position to allow the establishment of a free banking system in which a number of competing, commodity or asset based currencies could be established. Without State interference in the establishment of a market in banking services, the people of Taiwan would enjoy greater price stability and economic growth.

However, the vital corollary to the establishment of a free banking system is the wholesale reduction of the welfare state. The government of Taiwan simply cannot continue to take up 30% or more of GDP – it is simply outrageous. The existence of the central bank and its’ borrowing and lending activities is a key aspect of this Statist drag on Taiwanese society, but there are others whose importance cannot be minimized.

To begin with, I should like to see editorials in your publication putting the argument for the abolition of State funding for education, and for the abolition of the National Health Insurance scheme. Together, these two areas of Taiwan’s welfare state represent a colossal defrauding of the people of Taiwan.

There are far too many Universities in Taiwan. When every potential recruit to a business has a University degree, the market value of those degrees drops to something close to zero – and yet parents regularly get into debt for these useless emblems of status.

The National Health Insurance scheme insures continued employment for poorly performing healthcare practioners and continued profits for pharmaceutical companies both of whom are made immune from the discipline and cheaper prices of free market competition.

The argument for the free-market instead of the State, which is also the argument for civil society instead of political cannibalism, must be made on many fronts concommitantly. Free-market reform of monetary policy is of central structural importance, but free-markets in education and healthcare are vital for the pursuit of values that are felt daily by the people in Taiwan. Without free-market alternatives, civil society in Taiwan is doomed to a future of war and privation.

Yours sincerely,

Michael Fagan

(Sent: Saturday March 21st 2009. Unpublished by the Taipei Times)

Deductions From Mixed Premises Are Always Deluded

Sir,

Those who would discredit the economic policies of the Ma administration on statist grounds must expect to have their own economic prescriptions discredited since they share the same tacit premises.

International trade free from all taxes and restrictions does not benefit particular nations or states - providing 'benefits' is not the point. The point is to allow all people, regardless of nation, race, politics or any other arbitrary divider, the freedom to pursue their own self-interests without interfering with the freedom of others.

The purpose of State institutions stands in logical opposition to the existence of the free market. Contrary to popular opinion, the western countries - including the United States - do not 'benefit' from free trade since it simply does not and cannot exist so long as there are State regulations. Today there are regions of the UK for example in which the State accounts for 60% or more of the regional economy - which is greater than the corresponding figures for eastern European nations under the former Soviet Union.

Those who decrie economic liberalisation and free trade as the 'voodoo economics' of 'neo-liberalism' are either opposed to the freedom of the individual (in which case they may find company with the governments of the 20th Century) or they are simply the confused victims of mixed premises.

Yours sincerely,

Michael Fagan

(Sent: Thursday 12th March 2009. Unpublished by the Taipei Times)

Referendums On The Decisions Of Individuals Are Illegitimate

Sir,

I urge you to reconsider the basis of your editorial policy and the choices it leads you to make viz the selection of opinion pieces.

In yesterday’s opinion section, there was a column by one Lu Zhen Ru arguing for a public referendum on the proposed ECFA (economic cooperation framework agreement) on the grounds that it will induce more businesses to relocate to China “thus making Taiwan the loser in economic integration”.

It obviously did not occur to Lu Zhen Ru that if a business owner decided to relocate from Taiwan to China, that that would be his own private business and nobody else ought to have a damn say in it.

Implicit to Lu Zhen Ru’s argument is a misconstrual of the fundamentals of economics. The act of valuation is necessarily the action of an individual human being faced with a choice. Value is always a matter of an individual’s preference for one thing or another. How can a nation have a preference? Only via a majority, and of what? Individuals. Moreover a collection of individuals whose circumstances are all different and who are all faced with different choices to make, but who nevertheless feel themselves qualified to decide what the preferences of all other individuals should be. That is the economics of the cannibal pot.

What you see in columns such as Lu Zhen Ru’s is the tacit premise of collective economic and moral agency – i.e. the cannibalisation of values. A necessary corollary of this premise is the rejection of private property, a concept of the utmost importance to economic thought since the time of Smith and Ricardo.

Lu Zhen Ru is merely an example of the general kind of thing you publish and there is nothing especially bad about that column in particular. Yet it is as a result of that kind of column that readers of your pages, irrespective of their own knowledge or ignorance, are witnessing a creepy-crawly increase in economic nationalism and trade protectionism whose eventual consequences have ample precedent in 20th century history.

I urge you toward a reconsideration of the basis of your editorial policy.

Yours sincerely,

Michael Fagan

(Sent: Wednesday March 11th 2009. Unpublished by the Taipei Times)

Contra "Public" Debt

Sirs,

Taiwan’s public debt stood at somewhere between 27% and 32% of GDP last year.

Whilst the size of this public debt is not quite on a European scale (where public debt often reaches to 50% of GDP or more), nevertheless it can ill be afforded at a time when the economy is in recession. As major companies in Taiwan bend over backwards to find ways to streamline their operations, it is lamentable that the government does not follow their example.

The single greatest action the government could take to ‘stimulate’ the economy would be to eliminate the source of public debt which will continue to be a drag on the economic growth of Taiwan for many years to come.

Public debt comes from public spending on such things as education and healthcare. It is not merely a fallacy that such services must be publicly funded in the name of providing a ‘safety net’; it is a pernicious error that helps to entrap people in a spider’s web of dependency on the State.

There are a range of policy options available for paying off public debt. The first is tax increases – which nobody likes except those clients of the State who will be in a position to benefit. The second is to borrow from the public and external creditors via the bond market. Bonds, however, must eventually be paid back either by further debt or from present (or future) tax revenues. A third option is public investment in the stock and currency markets both home and abroad, which begs the question of why individual taxpayers in Taiwan are not competent to do so for themselves without the government taking their money in the first place.

But there is also a very dangerous fourth option – which your publication has not seriously opposed. That option is to inflate the money supply by asking the Bank of Taiwan to ‘inject liquidity’ (i.e. print money) into the economy. At the very least, any proposed increase in the money supply at this point must be made only on an assessment which includes ‘hoarding’ – as Professor Werner Sinn recently slandered it on your editorial pages – as part of the demand for money and not seperate from the demand for money. To act otherwise would certainly lead to greater currency depreciation, consequent price rises and damage to savings which would hurt the poorest people in Taiwan most of all.

It is of great importance that, throughout 2009, you and your sister publication, the Liberty Times, vigorously agitate against both monetary inflation and increases in public spending in any sector. Equally I urge you toward consideration of the benefits of alternative monetary systems free from political interference and of the benefits of a true program of privatisation in services currently funded by a coercive and wasteful drag on the productive activities of all of the people in Taiwan.

Yours sincerely,

Michael Fagan

(Sent: Saturday March 7th 2009. Published in the Taipei Times: Monday March 9th 2009)

Hans Werner Sinn is wrong

Sirs

Your featured opinion article from Hans Werner Sinn (Monday 2nd March) along with your headline article from Crystal Hsu the following day was yet another example of your publication's continuing incoherence with respect to economic affairs.

Sinn argued that deflation is now a more likely prospect than that of inflation. His basis for this argument was that since private individuals are 'hoarding' cash, the demand for additional money for other purposes (consumption and investment) is rising. Such an increase in the demand for money must, in Sinn's view, be expected to outstrip the increase in the supply of money if monetary deflation is to be expected.

Yet just the very next day, your own headline article, based on a telephone conversation with an anonymous currency trader, claimed that further depreciation of the NT dollar is likely - which would mean increased inflation.

It was the currency trader who was correct. Further currency depreciation to boost exports and its' accompanying monetary inflation is by far the more likely prospect for the NT dollar.

The German professor's claim that hoarding increases the demand for money ignores the simple fact that 'hoarding' is itself merely one form of the demand for money. The truth of this is easily revealed on a moment's reflection; many individuals are choosing to 'hoard' their money rather than invest or consume because they are currently in doubt as to appropriate investments and advantageous areas of consumption. This being the case, it will not do to suppose that 'hoarding' affects an increase in the demand for money. Rather, it is the demand for money.

Consequently, Sinn's forecast of monetary deflation is incorrect. The policies of central banks in increasing the money supply could well lead to greater inflation if such policies are continued or intensified, as I predict they will be.

Incidentally, the source of Professor Sin's error seems likely to be the perspective of one long accustomed to thinking of the economy from the point of view of the State - that is in terms of actions performed by social aggregates e.g. 'the private sector' rather than of myriad human actions performed by individual people (and as if they have no right to decide what to do with their own money).

The publication of Professor Sin's article on the monday, followed by Crystal Hsu's headliner on the tuesday did not reflect a coherent perspective on economic affairs.

What articles like that of Professor Sin's do reflect is the tacit political bias of the Taipei Times - not on China-Taiwan relations - but on the age old central political conflict between the liberty and rights of the individual qua individual and the group mentality of nationalists, communists and socialists all alike. The Taipei Times has been coming down on the wrong side of that conflict for far too long now without even knowing it.

Once again, I urge you toward a basic reassessment of all aspects of your editorial policy from the premise of individual liberty.

Yours sincerely,

Michael Fagan.

(Sent: Monday 4th March 2009. Unpublished by the Taipei Times)

On "national sovereignty"

Sir,

Your reporting on economic affairs – saturday’s article on the Ma administration’s CECA ‘framework’ with China was a prime example – leaves much to be desired.

Your report was entirely misconceived in its attention to the ‘impact’ of CECA on Taiwan’s sovereignty and democracy and the ridiculously named possibility of a ‘free trade agreement’.

Here is a fact: the concept of ‘sovereignty’ and also ‘authority’ properly belongs only to individual persons since the actions of a person can only be authored by a person possessing free will.

Here is a second fact: majoritarian democracy does not establish ‘legitimate’ national sovereignty. To force one person to abide by decrees made by others with which he disagrees in no way amounts to ‘national sovereignty’; it is in fact a veiled attempt to destroy the actual sovereignty of the individual person.

The ‘democratic sovereignty’ of any national government over my life or yours is a fictitious presumption. Ergo the sovereignty of either Taiwan or of China simply does not exist.

As a further consequence of this premise, it follows that any ‘free trade agreement’ that is either signed or not signed or is included in a ‘bi-lateral framework’ by the governments of Taiwan and China is a complete nonsense. A free-trade agreement signed by a government is like a birth certificate signed by a butcher.

Of course my words will read like nonsense – but that is merely a consequence of the nonsensical times we live in, not the veracity of the words themselves.

To the extent that anyone in Taiwan values his or her own life and freedom, it is imperative for them that their fellow countrymen come to view political and economic affairs on the premise of the free individual and not this ancient gibberish about democracy and national sovereignty.

As I have said before, the basic premises behind the Taipei Times’ outlook on the world are in grave error and it is high time that they are changed for the better.

Sincerely,

Michael Fagan

(Sent: Saturday February 28th 2009. Unpublished by the Taipei Times)

A Call For Monetary Reconstruction

Sir,

The Taipei Times’ recent overall coverage of economic developments displays an attempt at even-handedness that belies a misunderstanding of the nature of what is happening.

On the one hand, your readers are told that Taiwan relies excessively on exports to, and other investments in, China and that there is in contrast a pressing need to ‘stimulate’ domestic demand. On the other hand, they are told that further depreciation of the NT dollar is necessary to boost Taiwan’s export economy.

You do not have a coherent stance on economic affairs, and consequently are of no help to your readers.

Taiwan’s export economy will continue to contract for a long time yet. That is because the United State’s Congress’ ‘stimulus bill’ will fundamentally alter the basic political and economic premises of that country over the coming years. The consequences of that alteration which is now in progress will eventually be catastrophic for world trade.

In that context, a chief danger to the Taiwanese people is the risk of the government furthering an inflationary monetary policy in the coming years not merely to give aid to the export economy and save jobs that cannot be saved, but to pay for massive increases in domestic security expansion.

What better way to thwart such a potentiality than by a shift to a stable monetary system with the abolition of the central bank – such as would be required either under a system of free banking or a revival of the now forgotten gold standard?

Contrary to popular opinion, the technical difficulties of effecting such a transition are far from insurmountable – indeed they are not overly complicated. The chief difficulty lies with the legal and political barriers, not least of which is the assured opposition of the government together with a great many exporting industries.

Yet if enough public pressure is brought to bear upon these interests, I believe it may be possible to force them to accept a change in monetary system. It is therefore high time for a complete change in your overall editorial policy.

Sincerely,

Michael Fagan

(Sent: Wednesday February 18th 2009. Published in the Taipei Times: Monday February 23rd 2009)

A Call For A Complete Editorial About-Turn

Sir,

The current administration’s efforts to restore health to Taiwan’s economy not only will not work, they exemplify a collectivist morality and ought to be vigorously opposed throughout 2009.

The government is wrong to attempt to engineer greater domestic consumer demand in substitution for reduced consumer demand abroad. Since the supply side of the economy currently outweighs the demand side of the economy – it is the supply side that must be allowed to fall, not the demand side artificially increased by means of public debt.

The argument which your publication should seek to expound is not merely one of economic pragmatism, but a moral one. Each and every Taiwanese person is a sovereign individual – not a mere economic number – and so they ought to be free to make their own choices as to whether and how to spend or invest their money.

Consequently, the overwhelming desire of Taiwanese people right now to save their money and curb their spending, and the choice of many Taiwanese businesses to cut costs and reduce the scale of their commitments are decisions which ought to be respected – not interfered with. The government has no moral right to either order or merely encourage people as to what they choose to do with their own money.

I have for years now recognized the editorial stance of the Taipei Times as generally reflective of the broad political views of its readership. I speak of the 'social democratic' collectivist outlook seemingly constitutive of the Democratic Progressive Party.

In the face of a possible run on the U.S. dollar this year, I regard this stance as a source of danger to Taiwan in the short to medium term, and I strongly urge a reconsideration of philosophical premises and a complete about-turn in editorial stance.

Yours sincerely,

Michael Fagan.

(Sent: Sunday February 1st 2009. Unpublished by the Taipei Times)

Precepts

1) My narrow purpose in creating this blog is to undermine the editorial line of the Taipei Times.

2) My broader aim is to erode the psychological, structural and cultural supports to collectivism of all stripes in Taiwan.

3) I will pursue two methods - destructive criticism and constructive conjecture.

4) Although English is obviously not the first language of the Taiwanese, it is the language in which the Taipei Times is written and it is therefore the language I shall use. I shall not make any promises about simplifying my language for the benefit of learners, though I am happy to take the time to explain and answer questions.

5) I will allow comments, although I may not always have the time to deal with them.

6) I will not post according to any particular schedule - it will be entirely as and when I feel up to it.