Why We Vote for Our Own Ruin (And What Comes After)

1. The 120-Television Paradox

If you want to understand why your grocery bill feels like a mugging, why you cannot get a tradesman to show up for under five hundred dollars, and why your kids will never afford a three-bedroom weatherboard house within an hour of where they work, stop looking at dollars and cents.

Dollars are a rubber ruler. Central banks stretch and shrink the currency whenever politicians run out of spine, which is roughly every Tuesday afternoon.

If you want to see the real economy with the bark off, you have to measure time prices. How many hours and minutes of your irreplaceable life do you have to trade to buy a loaf of bread, a fridge, or a hip replacement?

Every six months, the economist Mark Perry updates what has rightly been called the "Chart of the Century," recently dissected again by Gale Pooley over at Human Progress. Perry tracks the price of fourteen major consumer goods and services in the United States since the year 2000, measured against average hourly wages.

Look at that chart for thirty seconds and you are looking at an X-ray of a split personality.

On the bottom half of the chart sit the things that have plummeted in price. Since 2000, overall inflation went up by roughly 90 percent, but average hourly wages rose by 127 percent. That means on average, an hour of your sweat buys nearly 20 percent more today than it did twenty-five years ago. And for specific goods? The time price of clothing, household furniture, food, computer software, toys, and mobile phone services has dropped through the floor.

The time price of a television set has dropped by over 99 percent. For the hours of labour it took an ordinary worker to earn enough money to buy one television in the year 2000, you can walk into JB Hi-Fi today and buy nearly 120 televisions (and they are sixty-five-inch flat screens, not those grey plastic cubes that weighed as much as a small tractor). Abundance in that sector increased by 11,868 percent.

Now look at the top half of Perry's chart. Look at the red bars surging towards the ceiling like a bushfire up a dry gully.

What are the things that now require vastly more hours of your life to pay for than they did in 2000? Hospital services. Medical care. University tuition. College textbooks. Childcare.

Spot the pattern? It does not require a doctorate in econometrics.

Every single item at the bottom of the chart (where things get cheaper, better, and wildly abundant) operates in a relatively free market where businesses have to compete for your wallet, innovate, or go broke. Every single item at the top of the chart (where prices explode, queues lengthen, and quality rots) is a sector where the government has stepped in to "help." Where the state subsidises demand, restricts supply, licenses the cartel, and wraps every transaction in ten thousand pages of bureaucratic compliance.

We see the exact same pathology on steroids right here in Australia. We call it the Nanny State, though "Nanny" is far too gentle a word for a six-hundred-pound gorilla that sits on your chest while lecturing you about your posture.

Walk down the street in Kiama or drive into Sydney today. You can buy a smartphone from Shenzhen with more computing power than the Apollo spacecraft for a couple of days' wages. Meanwhile, try getting an elderly parent into an emergency ward without waiting eight hours on a steel trolley in the corridor. Try paying for five days of childcare without surrendering an entire second income. Try building a shed or hiring an apprentice without drowning in Work Health and Safety permits, environmental impact statements, industrial awards, and council levies.

Over eighty percent of all new jobs created in Australia recently have been in the "non-market sector" (which is a polite Treasury euphemism for government bureaucracy and tax-funded care ecosystems like the NDIS, which now costs more than Medicare and grows faster than a tropical fungus). Everything the Nanny State touches turns to lead. It inflates the cost, rationing the supply, and breeds a permanent class of clipboard-carrying parasites who produce nothing, risk nothing, and tell the bloke actually swinging the hammer how to do his job.

Now, stop right there. Here is the question that drives free-market economists and sensible businesspeople completely around the bend:

If the evidence is that blindingly obvious, why do the voters keep screaming for more government?

Why do people look at a housing crisis engineered entirely by government zoning, government migration targets, and government property taxes, and demand more government intervention to fix it? Why do we look at the red bars on Mark Perry's chart and vote, election after election, to hand the state even more control over our money, our families, and our lives?

The standard conservative answer is that voters are stupid, or brainwashed by the ABC, or just haven't read enough Milton Friedman.

Rubbish. I have spent forty years studying consumer behaviour and watching human beings up close on the retail floor and in the boardroom. When millions of people repeat the exact same behaviour for fifty years, they are not making a mistake.

They are acting rationally.

2. Giving the Devil His Due: What the Leviathan is Actually For

Wait. Before we pull the wiring out of the wall to see why the voters are begging for their own serfdom, let us clear the deck of a cartoon fantasy that ruins most arguments for "less government."

I am not an anarchist. Anyone who tells you that we should abolish the state entirely, privatise the police force, and let the magical invisible hand of the market sort out everything from child murder to sewage disposal has never been punched in the nose in a dark car park, and has certainly never watched what human beings do when the lights go out.

Human beings are not angels waiting to be liberated from rules. Left to our own devices in a moral vacuum, human beings are tribal, short-sighted, greedy bastards. The strong eat the weak, the ruthless form cartels, and the guy with the biggest stick takes your wife and your cattle.

When I argued in Why France Is Burning that part of the solution to our civilisational doom loop is less government, I did not mean no government. A functioning civilisation requires a State with sharp teeth and a very narrow job description. Specifically, the State exists to do two things that free markets and individuals cannot do on their own:

(Notice how thin that job description is. Protect the border. Punish the crook. Enforce the contract. Stop the commons from being stripped bare. Then get out of the way and let free people trade, build, fail, and innovate.)

Now look at the modern Western Nanny State in Australia, Britain, France, or the United States. Look at the grotesque irony of what it has become.

The Nanny State has completely abandoned the two jobs it was actually hired to do, while invading every single domain where it has no business being!

Ask yourself: is the Western state enforcing hard, blind Law and Order? In France, there are over seven hundred Zones Urbaines Sensibles where the police cannot enter without being ambushed with iron bars. In Britain and Australia, if an angry mob takes over the steps of the Sydney Opera House or shuts down the Melbourne CBD every Sunday chanting imported tribal hatreds, the police stand by like nervous traffic wardens—yet if you post an impolite meme on Facebook or cut down a gum tree in your own backyard without a council permit, six compliance officers will be on your driveway by breakfast.

And what about the Tragedy of the Commons? Far from protecting the future from short-term looting, modern democratic government has turned the National Treasury itself into the ultimate Tragedy of the Commons.

Think about that. The public purse—funded by taxing the productive minority and borrowing against the unborn—is now a giant, unfenced fishing ground. Every voting bloc, every corporate lobbyist, every union, and every grievance group looks at the fiscal ocean and realises it is being fished to death. What is the rational move for a voter in that system? Do you hold back and practise restraint for the good of the country in 2050?

Have a laugh. If you hold back, the other nine blokes in the boat will scoop up your share of the debt-funded handouts and leave you holding the bill anyway. So everyone buys a bigger net.

3. The Delusion of the "Stupid Voter"

In General Systems Theory, there is an iron law taught by Stafford Beer: The purpose of a system is what it does. Not what the brochure says it does. Not what the Prime Minister claims it does at the Press Club. If a machine consistently produces bloated bureaucracy, exploding time prices for healthcare and housing, crushing public debt, and a nanny apparatus that treats grown adults like toddlers with learning difficulties, then that is what the machine is designed to produce.

When free-market types look at Mark Perry's chart, they think they are having an economic argument. They think if they just show people a bar graph proving that deregulation made televisions ninety-nine percent cheaper, the electorate will slap its forehead, vote to slash the Department of Health and the Department of Education in half, and usher in a golden age of liberty.

[Private thought: I used to believe that myself, back when I had more hair and thought human beings made decisions using spreadsheets. I think I finally grew out of it around 1994.]

You cannot fix a behavioural system with an economic chart because the voters driving the expansion of the Nanny State are not optimising for macroeconomic efficiency. They do not care about GDP per capita in twenty years.

When you strip away the polite political rhetoric and look at the modern Western electorate through the lens of evolutionary biology, cold game theory, and theology, you find three massive engines driving the growth of the State. Every single one of those engines is powered by people acting with ruthless, predictable rationality.

Let us put these drivers (and the eventual resolution) under the microscope in part II.