Good luck with that Jeremy, good luck with that

It’s not unusual to find people arguing that the State should be given near fascist (in some cases, actually fascist) powers over the economy: but only if the right people are in charge. The right people being defined as those who would use those oppressive powers in only the manner that those proposing the powers desire. The usual answer to this is that that’s not quite how democracy works. If you don’t want your enemies (ideological or actual) to have such powers as the electoral cycle turns then you’re really no business arguing that your folks would do just fine with them.

Shuffling all the Social Justice Warriors off into the Bedlam they need to recover is admittedly appealing. Yet we do not recommend such precisely because such powers might be used against us, those who froth at the mouth over the joys of free markets and voluntary cooperation, in the fullness of that time and variance of who the public elects. Better that none have such powers, eh?

At which point we have this rather plaintive cry from Jeremy Warner (or perhaps the subeditor who wrote his headline), someone we usually rather agree with:

If the state must meddle, it should do it better

Given the pedigree of those who do go into politics and other forms of “public service” that meddling never will get better. The answer is therefore as we have long suggested. Yes, there really are things which need to be done and which only the State can do. Said State should limit itself to only those things covered by that intersection and refrain from doing things which can be done by the State but do not have to be done, and also avoiding those things which do need to be done but which will not be well done by the State.

Limiting government to what it must do seems suitable given the limited skills and talents of those who govern us.

Marianna Mazzucato, wrong again as so often

Marianna Mazzucato is the right sort of writer for The Guardian: as the Daily Mash puts it, that newspaper is wrong about everything, always. So, here she is telling us that it’s very important indeed that government spend lots of lovely money on the area that Professor Mazzucato thinks important:

Growth is determined by strategic spending on areas that increase productivity, which in the UK is still below the OECD average. This includes investing in training, education, research and development, and state-of-the-art infrastructure. So while there has been a boost to some infrastructure spending, the lack of vision on what kind of economy we need for sustainable long-term growth means there has been little discussion about the direction of growth.

Growth is most certainly produced by investment spending, this is entirely correct. But as Matt Ridley has pointed out, it does rather depend upon who does that spending:

In 2003, the Organization for Economic Cooperation and Development published a paper on the “sources of economic growth in OECD countries” between 1971 and 1998 and found, to its surprise, that whereas privately funded research and development stimulated economic growth, publicly funded research had no economic impact whatsoever. None. This earthshaking result has never been challenged or debunked. It is so inconvenient to the argument that science needs public funding that it is ignored.

There’s not much of a case left for government spending on such things after that, is there? Which leaves Professor Mazzucato’s argument where it always has been, a justification for the EU to determine what is researched via research money funneled through the EU. Which is why, in our opinion, the EU funded her research in the first place.

The terror of the tampon tax

Following the Autumn Statement on Wednesday, women all over Britain have been in uproar. Why? Because George Osborne has decided to direct the £15 million pounds the treasury receives from the tampon tax into women’s charities and services.

As an article in The Guardian says here:

Women will now fund services that protect them from violence perpetrated almost entirely by men. Hey, men, not only do you not have to pay for violence that you inflict on women, but when we get raped, abused or brutalised, we won’t cost the state anything either! What message is that sending other than violence against women is some kind of “women’s issue”? It’s not. It’s largely a male issue.

And The Independent has chimed in, too:

Since the Tory government has failed women in so many ways, it makes undeniable sense for it to help us to help ourselves. Give a woman a tampon and she’ll use it for free; teach a woman to pay tampon tax and she won’t even cost anything extra to the state when she gets raped, attacked or laid off at work.

So if you’re a woman escaping from an abusive relationship in the Chancellor’s Britain, you can now pay for your own counselling through the redistribution of an unfair tax on your sanitary products. Isn’t that just perfect? It has a beautiful circularity, kind of like the menstrual cycle itself.

However, this view is misguided. The government cannot get rid of the tax completely due to EU laws, so they’re going to receive an income from it, no matter how much various women dislike that fact. Isn’t it therefore a good thing Osborne is at least diverting it into something that the women who pay the tax will directly benefit from? Would these groups rather the government used the money to bomb Syria? Reduce the bank levy? Cut taxes on top earners? Probably not.

From 2010-2015 the Tories spent £40 million on support services and charities aiming to help women who have suffered from domestic violence or abuse. This clearly shows that yesterday’s policy announcement is nothing new: taxpayer’s money has always been going towards helping women’s organisations. The difference is, women can now be safe in the knowledge that their £1.50 of tampon tax money per year is at least being spent on a cause they agree with.

Stop complaining about this decision, there’s no bloody point.

Ten initiatives to help young people: 6. A youth mental help body

A significant number of young people face mental health problems.  It might be bullying at school or at work, or sometimes difficulties encountered by discrimination.  Often it is depression, depression they find it difficult to cope with on their own.  Many face problems with their physical appearance, finding it difficult or impossible to conform to idealized notions of what they think they ought to look like.  This leaves them feeling inadequate and unhappy, which in turn can lead to mental problems.

The NHS does not do well with the mental problems faced by young people.  Sometimes and in some places it does well, but on average it fails to meet an adequate standard of care in this area.  Too many young people feel they are facing their problems alone and cannot cope.  Some attempt suicide, some tragically succeed.  

It is perhaps time to recognize that young people have special mental health needs, and that these are different in some ways than those faced by the general adult population.  Young people have little experience of life, are only just coming to terms with who they are, and can feel isolated, helpless and confused.  This suggests the need for an independent body to which they can turn for specialist help.  Some youngsters find the NHS remote and intimidating, unable to offer the intimate and personal help that is often needed.  This is perhaps because the NHS tries to use its limited resources to best effect, trying to save lives where it can.  Some critics say it is under-resourced on mental health in general, never mind young people’s mental health.  What the NHS spends on one thing cannot also be spent on another.

To prevent youth mental health losing out to more strident claims on resources, a separate body is needed, independent of the NHS, but with its services available free at the point of need.  Financed partly by the taxpayer, and party from the sponsorship of businesses and private benefactors, the body would be the natural one to turn to when young people needed help.  Advertising would help make its services widely known just as happens with the Samaritans.  With a name such as “Support,” it could readily establish a brand identity such that young people would know whom to turn to when they found their problems more than they could face alone.
It could provide expertly trained staff with experience of youth problems, people who would listen sympathetically and at a personal level.  It would not solve all the mental health problems faced by young people, but it could contribute to a significant improvement in the lives of many of them.

What a strange way to tax corporations

We’ve found over the years that Sir Simon Jenkins is generally sound on the subject of civil liberties. But he’s a great deal less assured when it comes to the subject of economics. A pity, because he has decided to tell us all how corporations should be taxed: clearly within the purview of the economic way of thinking. He tells us that:

The answer is clear. Companies should pay corporation tax on the basis not of their headquarters or research base or place of origin.

They should pay on the proportionate spread of their sales. Likewise, individuals should pay tax to the country where they live or whose citizenship they enjoy – as is the case with most Americans.

That companies should pay on the basis of their sales is one of those Chesterton’s Fence problems. Why doesn’t the system work that way already? Because it has been considered and rejected, that’s why. Such a system would mean that the company that made on single overseas sale would then need to file a full corporate tax return according to the rules of that country. This is not something that is likely to increase trade among small companies. And that’s why the system is as it is.

It’s entirely possible that it’s not quite right in detail, but the current system operates on the basis that if you’ve a permanent establishment in a tax jurisdiction then you do indeed file a local return. And a permanent establishment, while it’s not perfect, is used as a proxy for the corporation being a large enough actor in that local economy that it should be filing a tax return in it.

A business that one of us was once involved in once made a single sale of $6,500 gross value into India. The only sale into that country in a decade of operation. No sensible tax system is going to demand an Indian tax return on that basis, is it?

Sir Simon’s suggestion also flies into the very face of the basic underlying rules of the European Union’s Single Market. All companies are equal, from whichever jurisdiction, and may sell from any one EU country into any and all others.

Finally, look at the underlying idea. People buy things because they make them better off, by their own lights. The point and purpose of having an economy at all is to maximise this, to maximise peoples’ opportunity to maximise their utility. We thus say, well, you, Mr. Johnny Foreigner, you have just made some of the residents of our country better off. Hmm, we’ll have to fine you some tax for having done that you know.

Just not a sensible logical basis for taxation, is it?