Friday, October 11, 2013
The conventional view in Soviet Britain is that those who do business are heartless sorts driven by selfish pursuit of that dirtiest of all words in our foul-mouthed society; p**f*t. Yet my recollection of thirty happy years in business is of being under constant pressure to find ways to serve the interests of others. I like my fellow-men, trust them and certainly respect them more than any Socialist I ever met, but I didn't do it for love of them. I did it because that was the best way to help my business prosper.
Now I live mostly on my savings plus an occasional fee for consultancy, my life is very different. I suspect that in its daily details it's much more like that of a leftist academic (let's call him Ralph) who thinks profit is a dirty word. Subject to my social and domestic obligations, I spend each day more or less as I please. I have an online subscription to The Guardian so as to understand what my enemies have in store for me, but I no longer have any obligation to read outside my field of interest. Indeed most of what I read is written by people of the same views as myself. Despite my painful time with The Guardian each day, I am now almost as little exposed as Ralph to opposing points of view. Everything I write is to promote my own world view and - I suppose - to garner the approval of like-minded folk.
Unlike Ralph, I am not a cost to anyone else. His conscience is of the 'social' variety and is therefore untroubled by living on money taken by force from others. Mine would be. Like him, I now deliberately contribute very little to GDP by my labour, though my capital is doing its bit, as perhaps is his. He may - after all - have inherited from a family who were economic hosts rather than parasites. There are many Socialists of that ilk, not to mention the ones whose fathers prospered mightily as parasitic Ralphs.
Our Ralph does no productive labour because he's more focussed on redistribution of wealth than creation. I limit mine because I already have enough and am apparently - rather to my own surprise - less consumed by greed than he would think. I also don't see the point of working if more than half of my earnings would be taken from me and almost half of what was left when I died would be taken from my children. Ralph is probably an advocate of the policies that created this situation but thinks me selfish for refusing to work anyway and thinks I should be somehow forced to labour (a notion towards which all Socialism trends).
I pay indirect tax on everything I buy (£118.17 on my new iPhone, for example). I also pay Council Tax. This is tax taken from income already taxed, but in fairness Ralph pays it too. The only difference is that he pays from money ripped violently from his fellow men. I pay from cash received freely in return for contractual value.
The more my life becomes like Ralph's and the less I live the way he disdains as selfish - the more selfish I feel. The more I think about how he actually spends his time, the more I despise his self-indulgent lifestyle and his selfish refusal to contribute even his own costs, let alone pay those of many others - as I have done. He has not paid for his childrens education, for example. I paid for mine and for that of countless others.
So who is the more selfish; the man who creates wealth or the man who claims the right to seize the wealth of others? Who is the more heartless; the man who feels a twinge of conscience about no longer serving his fellow-men (despite having done do for decades) or the man who has lived his whole life on them as guiltlessly as a flea on a dog?
Not only is it resolvable, it's resolved. The injustices were centuries ago and there have been many generations of opportunity to add or lose value. Even the Duke of Westminster owns more of his land due to generations of successful management than to William the Conqueror's appeasement of his scary ancestor.
Most descendants of Norman lords have frittered and idled their way into poverty. Some have earned their way back to wealth again. Some have made the transition several times! The Middle Ages are only relevant to would-be expropriators looking for a moral basis for their desired theft.
Zuckenberg inherited no land but he's worth more than any US landowner. The more civilisation advances; the further we get from a primitive agrarian society, the less important land becomes. There is now nothing unique about it as an asset class, save for such negatives as its 'chunkiness' (the difficulty to divide it into small, rapidly-tradeable shares). That's why even high-net-worth individuals keep it down to a sensibly small proportion of their holdings. Most high value real estate is held by you and me through our pensions, insurances and other investments.
As for big houses, they keep the rain off no better than small ones and are very poor investments. They are luxury goods and do no more harm than other such.
Posted by: Tom | Friday, November 01, 2013 at 11:01 AM
There are many other examples of economic rents apart from those accruing to land owners that would be suitable for a wider kind of land value tax. You mention a good example in your first paragraph.
But classical lvt would go a long way in a good direction, given the current non-resolvable basis of land ownership in this country.
Posted by: Tomsmith | Wednesday, October 23, 2013 at 12:24 AM
That was one of the original and best Tom Paine's ideas. It made sense in agrarian times when land was by far the most important economic asset and was closely held by a small, unloved, group. It's far less important today. Facebook and Google's value, for example, is in Intellectual Property not Real Property.
Even a small libertarian state would need to raise taxes to operate (rather a lot for a while to pay off the cataclysmic debts run up by the gangsters of statism and achieve a balanced budget). I would prefer them not to tax income because that requires lots of information about private affairs to be shared and creates a huge, expensive bureaucracy but land taxes would raise contributions from too few - and too poor - people now. Google is a huge occupier of RP but it's mostly rented. It has far more revenue than those it rents from.
Commercial RP is such a chunky asset class that it is mostly held by institutional investors - which means Mr and Mrs Everyman through their pension funds, bank deposits and insurance policies. Taxing land value would hit the very last person you want to tax; you.
Posted by: Tom | Monday, October 21, 2013 at 06:20 PM
Always with the emotive reference to nurses, as if the seizure by force of their service created it. There were nurses before and will be after the nationalisation of medical services. And though there will be bad uns they will on average neglect their patients far less. The "public sector" (again with the euphemism) is ethically compromised by being based on violent extortion, however nice the individuals and however desirable good performance of their tasks would be.
Posted by: Tom | Monday, October 21, 2013 at 12:21 PM
"Pure justice cannot be attained-only a pragmatic form of it."
Land value tax?
Posted by: Tomsmith | Sunday, October 20, 2013 at 09:57 PM
OK... That's a fair point.
I think the key question is probably the nature of the government system, not so much the specific job of the individual within that system - I would have a hard time criticising a teacher or nurse - even a university lecturer - dedicated to their jobs but paid through taxation.
Under an alternative system they'd probably be just as keen to help people.
Granted - state funding of these services might not be the best system, but it doesn't really say anything about the people involved.
Likewise people working in the private sector can obviously be both incredibly thoughtful and kind, on the one hand, or exploitative on the other.
Maybe it's not really sensible to criticise people purely on the basis of their jobs.
Posted by: Mark | Tuesday, October 15, 2013 at 01:36 AM
However, I read Mark's comment as implying that a free market does not require some enforcement mechanism-as opposed to his view of the practise of law, which is effectively dependant on the enforcement mechanism,and part of it. Therefore Mark believes his business has inherent moral superiority.
But a free market does indeed require an enforcement mechanism-otherwise some would renege on their contracts freely entered into, if they later considered them diadvantageous (or more likely, not advantageous enough).
Tom, is right that taxes and the like are not freely entered into-but that was not the point I was addressing.
I do understand Mark's point. At some stage, when the "law of the jungle stopped", the biggest thief ended up having his ill-gotten gains legitimised. But that must always be the case-or the alternative is simply to prolong the law of the jungle.
And that way, we wouldn't advance at all.
The UK (and indeed other) privatisations are the reversal of theft by the state of assets from individuals. But the assets are not given back to the descendants of those individuals (although some were in East Germany and Eastern Europe). They are sold by the state for the benefit of the state-and hopefully, indirectly, the taxpayer.
Pure justice cannot be attained-only a pragmatic form of it.
Posted by: MickC | Monday, October 14, 2013 at 04:11 PM
Mark/Mick C, Maybe some confusion over what enforcement means or the use of force?
A real contract as opposed to a "social contract" (politicians noise and not a contract at all)is an agreement between consenting adults endtered into voluntarily, being held to the contract is intrinsic to and part of the agreement and framework it works in. Not honoring it is basically theft.
Posted by: Moggsy | Monday, October 14, 2013 at 08:42 AM
The point I was answering was the implication by Mark that somehow "free markets", in which he claims to operate, can exist without some means of enforcement.
Posted by: MickC | Sunday, October 13, 2013 at 07:19 PM
There is a huge ethical difference between enforcing a contract freely entered into and taking money by force through taxation.
Posted by: Tom | Sunday, October 13, 2013 at 01:16 PM
But surely, all "rights" are basically upheld by force, whether they are property rights or "human" rights?
A "free market" can only survive if there is enforcable contract law-in other words backed by the use of "force"-damages, bankruptcy etc.
So the "plenty of us who work in a free market" are in exactly the same position as Tom, aren't you?
Your living depends on the enforcement of contracts, as does everyones.
Posted by: MickC | Sunday, October 13, 2013 at 11:49 AM
Piffle. Every contract for my services was voluntary. No landowner I ever worked for acquired his property other than for value. The Middle Ages are over and the limitation period on any claims for wrongs done then long since expired.
Posted by: Tom | Sunday, October 13, 2013 at 08:18 AM
"Are lawyers really in any position to criticise politicians?"
As you point out, depending on the area they work, they could appear very hypocritical.
But that wouldn't take anything away from their argument. Though it might make their motive suspicious (not that I think Tom's working to a hidden agenda).
On an unrelated note, is there going to be another "Limiting the power of government" post?
Posted by: Andrew | Saturday, October 12, 2013 at 10:41 PM
If you worked as a lawyer specialising in real estate, all of your money was due to force used upon others, in the sense that we are all forced to participate in the legal system and the distribution of land is upheld by force.
Are lawyers really in any position to criticise politicians?
There are plenty of us who do work in a pure free market/ voluntary/ sector of the economy - but I don't see how lawyers can claim the same,
Posted by: Mark | Saturday, October 12, 2013 at 03:47 PM
I believe the vilification of selfishness is nonsense. Were everybody to attend to their lives on the basis of their own self interest then regulation and welfare would be nearly unnecessary. There would still be a need for individual charitable acts for those who cannot participate due to injury or defect and people might find it advantageous to operate as a group for certain large projects that benefit the common good and the commonwealth.
The biggest exponent of that idea was Ayn Rand and quite by chance this article also addresses the problems of entrepreneurs submitting to silly governmental diktats.
I must say I also like the writers use of Liberal, as in somebody who liberally spends the money of others, of course, that encompasses all politicians.
Posted by: Cascadian | Friday, October 11, 2013 at 10:49 PM
Posted by: cuffleyburgers | Friday, October 11, 2013 at 06:02 PM