Montreal, November 5, 2006 • No 200




Chris Leithner grew up in Canada. He is director of Leithner & Co. Pty. Ltd., a private investment company based in Brisbane, Australia.




"The most terrifying aspect of the whole fascist episode is the dark fact that most of its poisons are generated not by evil men or evil peoples, but by quite ordinary men in search of an answer to the baffling problems that beset every society. Nothing could have been further from the minds of most of them than the final brutish and obscene result. The gangster comes upon the stage only when the scene has been made ready for him by his blundering precursors."


-John T. Flynn, As We Go Marching (1944)


by Chris Leithner

          Private property is a bulwark of liberty. The more secure it is, the more individuals can protect themselves against the attacks of politicians and bureaucrats; and the less private the ownership, the greater will be the coercion, plunder and tyranny. Private property is also a necessary condition of justice. Creating property and exchanging it in the market bolsters the owner's responsibility for the moral and material consequences of his actions. Morally as well as legally, private property erects walls, and on them hang mirrors that reflect back upon the owners of property the repercussions, positive and negative, of their behaviour. Acting in the market, both the prudent and the profligate will over time receive their just desserts. In particular, private property is a powerful antidote to selfishness.


          It is also among the most peace-loving of institutions. Where rights to private property are respected, goods and services must be created either through individual initiative or co-operation among individuals. He who is free to create wealth through his own efforts and collaboration with others, and to accumulate the proceeds of his efforts, need not covet others' property. Accordingly, it does not behove him to plunder it. In a society where property is privately owned, not only is honesty the best policy: so too is industriousness.

          It is important to emphasise that private property erects walls, and that these ramparts shield us from communes' and governments' oppression. To own property is to possess the means to formulate your own plans, mobilise the information and insights in your own head, and to follow your own star. Liberty, justice and peace enable us to act harmoniously with but without interference from others. Finally, and for each of these three reasons, private property is a necessary condition of prosperity. Where a man enjoys liberty, justice and peace – where, in other words, others leave him free to regulate his own conduct and enjoy the fruits of his industry and improvements – he is likely to take heart, look to the future, strive on behalf of his wife and children to save, invest, work, accumulate capital – and thereby, morally and materially, to prosper.

What Are Property Rights, Anyway?

          Since Roman times, property has been regarded as a relationship, sometimes de facto and other times de jure, between a person (or a collection of people) and a thing. People who possess property rights with respect to specified things possess enforceable claims upon those things. During the past century, it has become customary to regard these claims as "sticks" that combine to form a "bundle." One stick is exclusion; another is physical alteration; a third is the unfettered enjoyment of the property and its fruits, such as income; and a fourth is the unhindered transfer of title of ownership. Accordingly, to possess property rights over a particular house is, for example, to be able to exclude others from its use, or to invite them upon the premises on your terms; to enlarge it when and how you please; to consume the shelter it provides (or to rent it to another person on terms acceptable to you), and to bequeath or sell it to another person (again, on terms and conditions acceptable to you).

          Broadly speaking, there are three variations of property rights: private, communal and state. Private property, which decentralises and formalises ownership, confers rights upon an individual or a strictly defined and enumerated group of individuals (such as members of a family trust, unitholders of a unit trust or shareholders of a corporation). Further, these rights are configured such that the benefits of ownership are borne on a formal and pre-agreed basis – and the costs of ownership absorbed on a pre-agreed basis – by these owner-members. If a house is owned by a corporation, rented and rental income is generated, then the proceeds typically accrue to its owners in proportion to the number of shares they own.

          Communal property, in contrast, confers the rights to some good or service to a less clearly defined group of people, and it configures these rights more ambiguously. What, precisely, does a given commune's property entail? Typically, no exhaustive and mutually exclusive map or list exists. Who, exactly, are the communal owners? Again, there is usually no definitive enumeration. Accordingly, the defining characteristic of communal property is that the benefits and costs of ownership are not delineated clearly and systematically. As a result, benefits from the ownership of communal property are typically harnessed by an ad hoc or exclusive subset of members (or even by non-members); similarly, the costs of ownership are often imposed upon another subset of owner-members or outsiders. Finally, state-owned property confers rights in such an amorphous and haphazard fashion that it is tempting to say that "public ownership" is simply a slogan that distracts the attention of the hapless many from the plundering of the privileged few (see, for example, "Down With Democracy!").

How Communal and State Property Beget Injustice, Conflict and Poverty

          It is axiomatic – and thus something that politicians routinely ignore or deny – that these three configurations of rights spawn very different incentives and disincentives. Accordingly, in a given situation the owner(s) of private property on the one hand and communal property on the other typically act very differently. How, then, does private property promote justice, liberty, peace and prosperity? How does communal and "state-owned" property beget their opposites? As a hypothetical but realistic example, derived from Tom Bethell's excellent The Noblest Triumph: Property and Prosperity Through the Ages (St Martin's Press, 1999), consider a complex of 100 condominiums, townhouses and flats.

          Let us assume that rights to the dwellings within the complex conform largely to our definition of private property. A clearly specified individual or collection of individuals (typically a couple or family) has exclusive use of each dwelling; the boundaries of each dwelling are mutually exclusive and exhaustive; and owners can alter or rent their dwellings and sell them on the market. Also assume that dwellings contain individual (that is, one per dwelling) thermostats but no individual utility meters. Instead, the entire complex is "master metered" as a collective – that is, there is a single, complex-wide electricity meter, one gas meter, one heating oil and one water meter, etc.

          How, then, are rights to utilities allocated within this complex? Communally. More specifically, let us say that, by the consent of the owners, this occurs according to three rules. First, each owner may use as much water, gas and electricity as he pleases (for simplicity, let us assume that each individual, couple, family, etc., owns the dwelling in which he, she or they reside). Second, every month, owners pay a fee to the complex's Body Corporate. Finally, every month the BC sums the collective expenses (including utilities) that it incurs, divides by 100 and sends invoices for that amount to each owner. From one month to the next, in other words, the BC fee will vary; but during any given month, each owner pays the same BC fee.

          What kind of behaviour does this communal arrangement encourage? Consider first Jane. She is a friendly owner-resident who is always ready to offer a cup of tea, a sympathetic ear and a helping hand to anybody who asks. For these reasons, and also because she conscientiously conserves water and energy, she is well known and popular among her neighbours. At her own expense, she has insulated the walls and ceiling of her flat, and has also installed a water-efficient toilet, shower nozzle and washing machine. She also minimises the time she spends in the shower, unfailingly darkens unoccupied rooms, lowers the thermostat in winter and increases it in summer, and otherwise does what she can to use as little water and energy as reasonably possible.

          What does this considerate soul have to show for her discipline? As one of 100 owners, it is reasonable to assume that every month she will reduce the complex's overall expenses by some modest amount. But she will personally recoup only 1% (1/100) of the total expense she has saved. In effect, Jane "exports" to the other 99 owners the vast bulk of the benefit of her frugality – but "imports" all of its cost (i.e., chillier winters, hotter and more humid summers, dimly-lit rooms, short and cold baths, etc.). Let us assume that her discipline reduces the complex's utilities bill by an average of $250 per month. If so, then her Body Corporate fee falls by an average of only $2.50 per month.

          Now consider Chris. He is an always civil but seldom overly friendly owner-occupier who allegedly works long hours (that, at least, is what he tells other residents when he scurries past them each morning and evening) and is thus seldom available to lend a hand or an ear to neighbours. Perhaps because he is energetically building his business, other owners forgive his eccentricities – like constantly leaving his high-wattage bulbs burning whether or not he is in the room (or, indeed, whether or not he is at home). Further, during the winter he increases his thermostat so that even on the coldest days he can comfortably wear short-sleeved shirts; and in summer he commands his air conditioner to run 24 hours a day. He also luxuriates as long as he pleases in his hot shower. And he tells his housekeeper never to hang his laundry on a clothesline: instead, she throws everything in the dryer.

          What are the consequences of his actions? Every month, it is reasonable to assume, he will increase the complex's overall expenses, but will personally incur only 1% of this increase. Chris "exports" to the other 99 owners the vast bulk of the financial cost of his profligacy – but "imports" all of its benefits (i.e., snug winters, cool and dry summers, long and hot showers, fluffy towels, etc.). Let us assume that his behaviour increases the complex's utilities bills by $500 per month. As a result, his Body Corporate fee increases by a mere $5.00 per month.

          As a specific example, consider what happens when Chris departs for a four-week Christmas holiday. Walking towards his fuel-efficient car (hey, he bears the full cost of the petrol it consumes, and petrol isn't cheap), he contemplates turning off his air conditioner. But he quickly thinks again: if he does so then in a month's time he will return to a hot and humid townhouse that will require several hours to cool. That is obviously several hours too long, and so he leaves the AC running 24-7 during his absence. Let us say that the cost of his decision raises the complex's energy bill $150 above what it would have been had he turned off the AC. Consciously or otherwise, Chris reasons that he will pay only 1/100 of this amount. That is, Chris pays $1.50, Jane pays $1.50 and the other 98 owners pay the remaining $147.00. Chris decides, in effect, that the cost to himself of his self-regarding decision is so slight that less costly alternatives, such as leaving a key with Jane and asking her to turn on the AC a few hours before his return, do not enter his head.

          But this waste does not end with Chris: over time, the average owner is ever less likely to resemble Jane and is more likely to imitate Chris. Why? Under existing arrangements, the benefits of conservation are difficult to privatise and the costs of profligacy easy to collectivise. As a result, the financial rewards of conservation are slim – and so too are the costs of water and energy gluttony. Over time, therefore, the complex's consumption of electricity, gas, water and any other jointly-metered expense is likely to rise. Clearly, then, "master metering" encourages consumption and discourages conservation.

          But a corrective mechanism is readily to hand: the installation of a separate meter within each dwelling. The complex, it is vital to recognise, has neither a "water problem" nor an "energy problem" – it has a property rights problem. The problem is that property rights to utilities are insufficiently private. What to do? The solution is obvious: replace the communal right to utilities with a private right. Thanks to the walls that already separate each dwelling, water and energy consumption already are – indeed, always have been – private. The addition of private meters enables each private owner to receive bills that correspond to his (or his family's) private consumption.

          Note that a majority of the complex's owners are likely to oppose, some of them stridently, this "privatisation." The necessary rewiring and installation of private meters will entail a significant upfront cost. Its benefits (namely reduced utilities bills), on the other hand, may require several years to cumulate to the point where they significantly exceed the upfront cost. And recall that the collective arrangement discouraged conservationists and encouraged pigs; as a result, the number of the former tended to fall, and the latter to rise, over time. More owners act like Chris, and each owner votes (or, at any rate, has the opportunity to vote) at Body Corp elections. As a result, in this complex – and indeed everywhere where collective arrangements reign – a coalition of pigs is likely to govern.

          The Body Corporate will also be reluctant to consider this privatisation because, whatever their rhetoric to the contrary, the owners – who, after all, select the BC – do not regard their "investment" in their dwellings as long-term. On average, Australians (and Britons and Canadians, etc.) live at a given address for less than seven years. And like Australians as a whole, valid logic and reliable evidence will often make little or no impression upon the owner-occupiers within this complex. As a matter of facts and reasoning, separate meters are indeed likely to increase the value of the complex's dwellings – particularly for frugal and other-regarding owners like Jane. But Chris and other pigs will likely ignore or deny this relatively large unrealised long-term benefit (in the form of the higher market price of their dwellings) of privatisation, and focus upon the relatively small, short-term realised benefit (the receipt $X of utilities in exchange for less-than-$X of fees) that collective arrangements enable them to reap at others' expense. Chris and his gluttonous allies will thus tend to concoct some pretext, no matter how emotive, irrelevant, groundless and idiotic, to scuttle the proposed privatisation.

There Goes the Neighbourhood

          Let us take this example of communal allocation of utilities to its logical conclusion. Assume that the executives of the Body Corporate, with the complaints of owners ringing in their ears, agree that the "master meter" system is intolerable. But they reject its privatisation not just because they dislike the upfront expense, but also because they dislike the idea of – indeed, the very word – "privatisation." They begin to recognise that existing arrangements create "winners" (selfish people like Chris) and "losers" (altruistic people like Jane), and they resolve that this is unjust and must somehow be corrected. But how? We are Australians (or Canadians, etc.), and the most fundamental Australian value, say the babblers that pervade the country (particularly the kleptocrats in Canberra and Ottawa who brazenly use it to cloak their thievery), is the "fair go" (or "social justice," "equal access to social services," etc.) So thank goodness for warm and fuzzy words. Members of the Body Corporate thus resolve that they will "raise energy awareness," "eliminate energy selfishness" and "achieve energy justice" within the complex – but without the "unfair" privatisation that will "benefit the rich," "harm the poor" and thereby endanger the sacred "fair go."

          So what, in practice, will they do? The first step is typically exhortation. Volunteers post hoardings in lifts and along corridors and other common property, and stuff circulars into each owner's post box: "Think of others, think of the environment, and do the right thing. Reduce your consumption of energy!" Jane, pleased that something is finally being done, continues and perhaps even increases her frugality. Chris, relieved and amused that nothing significant is being done, spouts the fashionable rhetoric at opportune moments but mocks its message. Eventually it becomes clear to everybody that gibberish hasn't worked – that is, the consumption of water and energy (and hence the monthly Body Corporate fees) continues to increase.

"Where rights to private property are respected, goods and services must be created either through individual initiative or co-operation among individuals. He who is free to create wealth through his own efforts and collaboration with others, and to accumulate the proceeds of his efforts, need not covet others' property."

          Because jawboning has achieved nothing, the Body Corporate turns to sterner measures. The failure of the campaign of exhortation has dampened spirits and thus stemmed the flow of volunteers, and so the BC (on the advice of paid consultants) hires "energy monitors" to patrol the corridors, knock on residents' doors and admonish them to conserve utilities. Initially, most residents politely assure the monitors that they're doing the right thing and indignantly insist that "the real problem" lies with other owners. After a few months, many residents, tired of the badgering, simply ignore the knocks. Jane, pleased that something else is being tried, disappointed that nothing has yet worked but secure in the knowledge at she's doing the right thing, continues (albeit with less fervour) to economise. Chris claims that he's always at the office and so is never at home to hear the knocks. Further, secure in the knowledge that nobody (least of all Chris) knows how much he consumes, he continues to consume as much water and energy as he damn well pleases. The average resident complains ever more loudly about the relentlessly rising fees, deplores the "budgetary problem" that is emerging ("we can't afford proper communal childcare because the communal energy bill is so high!") and demands ever more vociferously to the Body Corporate that it "do something."

          In response to the rising pitch of complaints and after much hand wringing and some rancour, the Body Corporate intervenes more directly in owner-occupiers' personal affairs. The complex's Constitution is amended such that every owner must provide a spare key to an expanded force of energy monitors. The BC reassures residents that their concerns about privacy are groundless because the monitors will enter dwellings only after knocking and receiving no reply. And besides, sneers the Body Corporate with not a little impatience, "if you're doing the right thing then you have nothing to fear." Jane, who has unfailingly done "the right thing" from the start, resents the imposition and worries what might happen in her dwelling whilst she is at work or on holiday. And if Person X with a key can enter her flat when she's not there, what's to prevent X (or somebody to whom X has given her key without her knowledge) to enter when she is there? Chris anticipates this intrusion upon his property and takes precautions to avert it. Rather than surrender his key, he offers to pay the monitors to leave him and his townhouse alone. Receiving money from both Chris and the BC, and lacking any mechanism to ascertain the efficiency and effectiveness of their services, the monitors are more than happy to accept his offer.

          But all to no avail. Consumption and hence fees continue remorselessly to rise, owners become desperate and so draconian measures are eventually imposed. The Body Corporate will issue special ID cards to owners and their families, and hire electricians to rewire the complex such that lights, AC, heating, etc., work only when the ID card is swiped into a monitoring device installed inside each dwelling. Consumption of electricity, gas, etc., will be permitted only during certain hours decreed by the Body Corporate; and once consumption within each dwelling reached some specified threshold, no further energy will be supplied. Further, owners must provide bank account details to the Body Corporate, which will directly debit its fees every month. If owners will not do "the right thing" voluntarily, then the BC, in the name of "energy justice," will bloody well force it upon them! But is this justice? Jane belatedly realises that her home is no longer her castle: henceforth, it is effectively her prison and the Body Corporate is her gaol keeper. But Chris remains unaffected. Alerted well ahead of time by friendly energy monitor contacts, who told him all he needed to know in exchange for a generous gratuity, he sold his townhouse and left the complex.

          Note the sad state of affairs that has come to pass: the Body Corporate saddled owners with inexorably rising utilities fees, and now massive "infrastructure" and "social justice" expenditures. It has also violated owners' feeling of safety within their dwellings, and in these and other ways it has weakened their rights as owners of private property. It has also eroded owners' means and motive to maintain their dwellings. Roofs, for example, fall into disrepair because residents can less and less afford to maintain them; and they can no longer afford this expense not least because their BC fees have exploded. For all of these reasons, the market prices of dwellings within this complex fall steadily. Who wants to live in what is becoming a ghetto of high taxes, poor services, deteriorating quality of life and growing compulsion? What was once a pleasant place to live is rapidly ceasing to be so. Owners belatedly realise that they have a property rights problem – their property, after all, is disintegrating before their very eyes – but the linkage between the collective organisation of utilities, the laws of human action and their present woes continues to elude them.

          Finally, note that all steps short of coercion and impoverishment have failed to stem the consumption of energy – the very "problem" that originally prompted the rising spiral of interventions! One poor policy – the initial, collective allocation of property rights to utilities – has prompted a cascading series of ever more destructive interventionist policies. One intervention piled atop another has inflated costs, decreased benefits, corroded morality and shrunk liberty. Note, then, the fundamental principle: if rights to property are collective rather than individual, then both efficiency and justice suffer; what begins as exhortation eventually becomes coercion; the more compulsion, the weaker the rights to private property; and when coercion replaces liberty, prosperity as well as justice evaporate.

Private Property, Glorious Private Property

          For two reasons, the results of the master-metered billing arrangement are unjust. First, despite all the fair-sounding rhetoric, Jane's kindness and thoughtfulness (that is, her desire to conserve resources and minimise the costs she "exports" to others) is penalised. Injustice also arises because the communal arrangement enables – indeed, it encourages – Chris to impose upon others the costs that rightfully should fall upon his own shoulders. Whether he does it consciously or not, by exploiting the communal arrangement Chris acts selfishly. In effect, the communal billing system pays Chris to do the morally wrong and economically wasteful thing. That is, it behoves him to be both spendthrift and selfish. This result generalises. Selfishness, which most Westerners insist is the great moral flaw of private rights to property, is actually far more likely to arise in situations where private property either does not exist, or where the definition and enforcement of private rights are difficult to achieve.

          To appreciate this fundamental point, let us return to our example. This time, however, suppose that a majority of owners quickly detect the perversities of the communal billing system and agree to install private utility meters. What impact are these new arrangements likely to have upon the behaviour of Jane and other considerate people? Probably little or none. How will these new arrangements affect these people's spirits? Their finances? They will likely strengthen both.

          Recall that Jane strives to conserve energy. The new, privatised arrangements reward this virtue and thereby give her a financial incentive to continue her efforts. How so? The amount she pays for utilities now depends upon her actions (which she can control) and not upon others' actions (which she can't). Given her discipline, once rights to utilities are privatised her bills (which now accurately reflect her consumption) are likely to fall significantly. Every month, her relatively modest bill reminds her of (or, like a mirror, reflects back to her) the financial benefits of her prudence. Under these privatised billing arrangements she reaps the positive benefits of what her conservation has sown. Jane rejoices at her savings and the uses (e.g., accelerating the repayment of her mortgage, hosting of dinner parties, undertaking face-to-face charity to the less fortunate, etc.) to which she can apply them. As a result, under these private billing arrangements more people will tend to act like Jane.

          What impact are these new arrangements likely to have upon the behaviour of Chris and other utilities pigs? Probably some and perhaps much. How will they affect their spirits? Initially, they will likely deflate them; subsequently, they will tend to reform them.

          Recall that Chris, perhaps without realising it (how could he? Without a personal meter he could only guess how much he consumes) is predisposed towards ever greater energy gluttony. The new billing arrangement punishes this vice and thereby gives him a financial incentive to correct it. How so? Under the new arrangement, he continues to "privatise" the benefits of his profligacy; but he can no longer "collectivise" their costs. Like a mirror, private rights to property reflect both the benefits and the costs of his gluttony back upon him. Given his indiscipline, once rights to utilities are privatised his bills are likely to rise considerably. Every month, these bills remind him of his imprudence. Chris bewails the opportunity cost that now stares him in the face: either he economises his use of water and energy, or he tightens his belt elsewhere (i.e., he must spend less time at the pub, races, etc.). At last, he must confront the negative financial consequences of his actions. As a result, under these private billing arrangements fewer people will act like Chris.

          Imagine that Chris is once again commencing a month-long summer holiday. This time, however, he has a much stronger incentive to turn off his air conditioner. He knows that if it remains running during his absence it will consume $15 of electricity – and that he will have to pay the entire amount. If he switches off the AC, does he act selfishly? It makes no sense to say that somebody who acts prudently thereby acts selfishly. But suppose that Chris again decides to leave his AC running. Perhaps his dislike of a hot townhouse upon his return outweighs the expense it will impose upon him. Is this selfish? It may be wasteful, but if he bears all of his decision's consequences then how can it be selfish? It is in this fundamental sense that the privatised billing arrangement is fair and just. Just as Jane's reward (namely lower bills) relates directly and proportionately to her virtue and discipline, the penalty borne by Chris relates directly and proportionately to his vice and extravagance. If Chris's bank balance depletes, then we might conclude that his decision to leave the AC running is stupid and harms himself. But idiocy and self-harm is not selfishness.

          A startling – to sceptics and enemies of rights to private property – result emerges from this extended example. Where rights to property are communal, it makes sense to describe some actions (like Jane's) as altruistic and others (like Chris's) as selfish. But when private property supplants communal property, it no longer makes sense to talk of either public-spiritedness or selfishness. It is precisely in situations where private rights to property are imprecisely defined, or not defined at all, that selfish acts are possible. Indeed, these situations encourage – because they reward – selfishness. It is in these situations that the individual, considering his own interests, has the opportunity to "export" his costs to others. A selfish person is one who takes a disproportionately large share of some common good and leaves unreasonably small shares for everyone else. But where all the shares have been mutually-exclusively and exhaustively defined and are privately owned, selfishness is no longer possible. We may therefore turn the tables on the legions who say that if private property "works" then it does so only because it gives free rein to selfishness. Quite the contrary: where private property does not exist, it is actually greed that will be given free rein.

          Accordingly, it is communal and not private property that breeds injustice. In Summa Theologica, Thomas Aquinas stated "the act of justice is to render what is due … Justice, properly so-called, is one special virtue, whose object is the perfect due, which can be paid according to an exact equivalence. But the name of justice is extended to all cases in which something due is rendered." By ensuring that something due is rendered – such as high bills to squanderers and low bills to conservers – private property advances justice.

          The great moral blessing of private property is that it enables people to benefit from their discipline, industry and frugality, and also to insulate themselves from others' sloth, recklessness and profligacy. One cannot over-emphasise it: private property is a mirror that reflects back upon its owner the ethical consequences of his actions. The industrious will reap the benefits of industry, the frugal the consequences of frugality – and likewise the improvident, slack and idle the results of these vices. People will usually receive their due, which is to say that, as a matter of routine, they will experience justice. Private property, in other words, institutionalises justice. This, its greatest moral blessing, dwarfs its many material benefits.

Democracy: The Worst Possible "Master Meter"

          If you accept (or are at least prepared to consider) this conclusion, then also consider two implications. First, in Queensland (and elsewhere in Australia, Britain, Canada, etc.) there is no "health care crisis" – instead, there is a crisis of property rights in the sense that, thanks to idiotic Commonwealth and State governments and the stifling collectivist orthodoxy they strive to impose, rights to medical goods and services are insufficiently private. Similarly, in Brisbane (and who knows how many other cities), there is no "water problem" and there are no "traffic problems." There are property rights problems in the sense that – you guessed it, and thanks to all three levels of government – ownership of water and roads are insufficiently private.

          Second, and even more generally, the alleged failures of markets are actually manifestations of the abject failures of politicians and bureaucrats – particularly their suppression, corruption and destruction of private rights to property. When the crowd chants "market failure," in other words, think "government failure." As a piθce de rιsistance of this line of reasoning, consider a government's budget. With our "meter" example in mind, this budget can be regarded as a communal pool of money that is replenished every year with the property (namely the money) that is looted from the government's subjects. Gathered around this communal pool, like wolves circling a terrified lamb or bullies tormenting a shy schoolboy, are politicians. They are powerful because as a group they claim the right to siphon money from the pool. Note that the stronger the pollies' "siphoning rights," the more precarious are individuals' rights to private property. Each year politicians drain the pool, keep some of the proceeds for themselves, dispense some to their bureaucrats and their poodles such as academics, and channel the rest to favoured recipients in their constituencies. Party labels are irrelevant because politicians' squabbles about the extent and nature of the siphoning are trivial, and their agreement-in-principle about the necessity of siphoning is deep and unshakeable.

          Notice that government expenditure rises remorselessly for exactly the same reason that utility consumption rises inexorably in "master metered" complexes. Democracy in Australia and elsewhere is "master metered" because taxpayers, much like residents of the complex in our original example, pay "Body Corporate fees" at the same rate. The Commonwealth Tax Act is uniform across the country, and so too its counterparts in other countries. This communal arrangement encourages taxpayers and hence politicians to behave like pigs – that is, to drain the annual pool as quickly as they can, and to siphon from the pool more than they contribute to it. As in the complex's Body Corporate, so too in the parliament: given these communal incentives, a coalition of pigs inescapably emerges, and rising costs, injustice and poverty inevitably result.

          What is the solution? Is there a political equivalent to individual utility meters within a residential complex? As a modest beginning, why not begin by amending the tax code so that taxes within each constituency adjust up or down according to the amount that its Member of Parliament votes to spend? With one "meter" per constituency, profligate MPs would then impose a heavy burden of taxation upon their constituents, and frugal ones a light burden. But why stop there? Why not extend this idea to its logical conclusion? Why not reduce the size of parliamentary constituencies so that each voter can exert a decisive influence upon which candidate is elected, and so that the actions of MPs conform perfectly to their constituents' desires? Why not reduce the size of "constituencies" to one person (or one household, couple or family), such that each person or head of family is effectively his own MP, raises and spends his own "taxes" and thus reaps the maximum benefit and incurs the maximum cost of his own decisions? Where each man is his own MP, all communal meters are abandoned and each person or family pays for what it consumes in the free market. So forget the lunacy of "one man, one vote" – one meter per man (or couple or family) is the way to go!

          Why not, in other words, shut the stupid parliament, dismiss the evil politicians, extend self-government to its logical limit and return private property to its rightful place at the centre of civilisation? But back to the real world: it is safe to predict that, just as Chris and his coalition of energy pigs scuttled the privatisation of the Body Corporate's utility meters, today's political pigs and their legions of selfish mascots will thwart this "ultimate privatisation." Their grounds will be equally emotive, irrelevant, groundless and idiotic; and their results will be just as harmful to liberty, justice, peace and prosperity.

          The sobering reality is that, as H.L. Mencken cautioned, politicians' "urge to save humanity is almost always a false front for the urge to rule." Today, we face a real and growing threat to civilisation. But it does not lie abroad: it exists right here at home. Tyranny seldom emerges suddenly. Typically, it waxes gradually and in direct proportion to the waning respect accorded to private property. All politicians promise that they will be good masters, but make no mistake: they intend first and foremost to be masters.

          Today, in most Western countries the portents are clear. And the warning of John T. Flynn, uttered in 1944, has stood the test of time so well that it now sounds prophetic. His vision of the future is a mass – and hence much more frightening – version of our Body Corporate gone mad. "Fascism," he said in 1944, "will come at the hands of perfectly authentic Americans who have been working to commit this country to the rule of the bureaucratic state; interfering in the affairs of the states and cities; taking part in the management of industry and finance and agriculture; assuming the role of great national banker and investor, borrowing billions every year and spending them on all sorts of projects through which such a government can paralyse opposition and command public support; marshalling great armies and navies at crushing costs to support the industry of war and preparation for war which will become our nation's greatest industry; and adding to all this the most romantic adventures in global planning, regeneration, and domination – all to be done under the authority of a powerfully centralised government in which the executive will hold in effect all the powers, with Congress reduced to the role of a debating society."

          Chris, ever alert to his self interest and entertaining few illusions about his rulers, will structure his affairs such that they mitigate the worst of these effects. But Jane, who has largely succumbed to the Stockholm Syndrome and thus regards her rulers as protectors rather than predators, may not be so fortunate.