The re-emergence of the hard left

“Always after a defeat and a respite, the shadow takes another shape and grows again.”

“I wish it need not have happened in my time,” said Frodo.

“So do I,” said Gandalf, “and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us.”

Some Conservatives short-sightedly welcomed the rise of Jeremy Corbyn to the Labour leadership because they hoped it would make Labour unelectable. It might, but accidents happen in politics. What it has done is to put lunatic policies into mainstream discussion. Because of his official status his pronouncements have to be covered by the media as if they were serious viable policy. We now have to listen daily to ideas that were discredited decades ago. Back from oblivion have come the nostrums of state-run businesses and punitive tax rates on those disapproved of. His appointment of like-minded colleagues has dispelled any notion that he might be a coalition builder and someone who can create the compromises that real-world government is built upon. The fanatical zealotry of some of his supporters, and the hatred they exude towards opponents, gives us some idea of the sort of politics that could be inflicted upon the country.

The danger has to be confronted. The ideas and arguments put out in support of extremist proposals have to be shown to be dangerous, impractical nonsense. These have been tried many times and have failed many times. The arguments for free choice, competition and enterprise, have to be made again and won again. We will play a part in that. Some of what we say will be well-known to some of our loyal readers, but it is worth saying it to a new audience who might otherwise be fooled into thinking that the state can run businesses efficiently, or that government can run people’s lives better than they can do so themselves.

We will publish a series of posts which remind people of the core principles of why liberty and markets are usually better than governments and state officials at improving people’s lives.  We will look forward, as we always do, and innovate ideas that can address problems and shortcomings with practical solutions.  But we will occasionally look back to the reasons why Socialism failed before, and why it would fail again, were it to be given the chance.

Steve Masty: an obituary

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Stephen J Masty, a longtime friend of the ASI, died on December 26th in London. He was one of the first friends I made when I taught philosophy and logic at Hillsdale, and was one of my most engaging and witty students. He went on to study at the University of St Andrews, and came down to help us out in the early days of the Institute. He was a talented cartoonist, and designed some of our graphics.

He moved to D.C. to work as a columnist with the Washington Times and as a speechwriter to several key Republican leaders. He was noted in the D.C. political and media community as a talented writer and witty raconteur.

He did a spell in Afghanistan with the Mercy Fund, producing leaflets and cartoons to help people, especially children, cope safely with the dangerous debris left after the Soviet withdrawal. He went on to spend much of his adult life as a development expert, working on projects in South Asia and Africa, as well as in the Middle East. He wrote and directed development movies, and one of his privatization video songs, recorded by local celebrity Captain John Komba, reached the top of the Tanzanian music charts!

In the early 1990s he managed the American Club in Peshawar, accompanying on his guitar some of the satirical songs he had written. He became a legend in the region, as he later did in Kathmandu, for his eccentric charm and bonhomie.

When in the UK, he made the Savile Club his home, and was well known and well liked by the other members. Some of his cartoons of them adorn the Club’s walls, alongside pictures by Augustus John and others. He wrote novels, children’s cartoon books, and movie scripts, and eventually took out British citizenship. It was characteristic of him that he had a letter in the Times that very week complaining about “foreigners coming to take our jobs!”

He led a colourful life, surviving a Taliban siege of Kabul and an earthquake in Kathmandu. He leaves us with many fond memories of good times spent together. The ASI has lost a talented and valued friend.

(the photo shows Steve in DC between two other ASI supporters)

Ten initiatives to help young people: 10. Young person’s business package

 

Government should help young people who wish to start up their own businesses by putting together a “young person’s business package.”  There is unused space at both local and national government level that could be converted into start-up work spaces.  These could be made open plan with desks, computers and wifi, with shared facilities such as toilets and vending machines.  These could be rented very cheaply to people under 25 looking to start a business.

Government could also take an active role in matching young people with mentors from among those who have followed this route successfully themselves.  The business community can be asked to participate, supplying lists of mentors to teams within the Department for Business, Innovation and Skills, who can then match them up to young people starting up a business, in order to provide them with help and guidance.

Finance should be available in the form of loans.  Many start-up businesses require very little initial capital because they tend to grow organically, lifting themselves up by their bootstraps.  But there are stages where some capital is required, and government should join in a scheme with banks and businesses to make it available as loans to start-ups deemed to be sufficiently merit-worthy.

There is considerable evidence that young people are inspired to become entrepreneurs when they are in contact with other entrepreneurs.  Government should work with business to set up a series of school visits by successful entrepreneurs to talk from their own experiences about the nuts and bolts of starting and running one’s own business.  Schools should be encouraged to apply for such visits and to make time available for them.

Local governments should be asked to run one-day workshops for young people, with sessions throughout the day on various aspects of entrepreneurship.  These should feature successful people, plus professionals such as tax experts and people with skills in marketing and advertising.  School students should be given time off school to attend them.  The aim would be to impart a thorough grounding into what it takes to launch a successful business, and how to avoid some of the common pitfalls.

The aim of the “young person’s business package’ should be not only to impart the essential information, but also to motivate people to strive to become successful entrepreneurs.  It is contact with others who are following this path, and with those who have already trodden it successfully, that can do this.

 

Ten initiatives to help young people: 9. No National Insurance for under 25s on minimum wage

Government has committed itself to raising the income tax threshold to the level of the minimum wage and indexing it there so that it will automatically rise to match any increases in the minimum wage.  The Adam Smith Institute has urged this for many years, largely on the grounds that if people are on wages that are reckoned to be the minimum, the state should not be taking money from them in taxation.

There is one further thing that the government could do in this respect, however.  People on minimum wage are still liable to pay National Insurance, which has a threshold lower than that for income tax.  Since young people feature prominently among those on minimum wages, this hits them hard, taking money from those already struggling to get by on minimum wage.

It would help those young people if it were government policy to make the two thresholds the same for the under 25s.  That is, the NI threshold for them would rise to the minimum wage level, so that when government achieves its aim to equate the tax threshold with the minimum wage, those under 25 on minimum wage will pay neither income tax or National Insurance.

In large measure the whole system of National Insurance is an anachronistic anomaly.  Although originally conceived as an actual social insurance, it has long since ceased to be so.  There is no fund, and it operates like income tax on a pay-as-you-go system, with today’s payments being used to meet the needs of today’s beneficiaries.  The case for integrating NI into income tax is strong, but before then there is as a stronger case for calculating liabilities on the same basis as for income tax, with the same thresholds and exemptions.  If government feared how people would react when they saw how much tax they were paying in reality, they could run it as an “employment tax” running alongside income tax.

As a first step in that preferred direction, they should now have the NI threshold equated with income tax for the under 25s.  The further alignment of the two can be done later in systematic stages.  But the help given to low-paid young people would be immediate and effective.

Ten initiatives to help young people: 8. Help with work-elated transport costs

The cost of travel to and from work falls particularly hard on young people because it often constitutes a higher proportion of their wages than it does for more established people.  The cost can run into thousands of pounds a year,.  Although young people (16-25) with railcards can qualify for one-third reductions on travel, these are only for off-peak travel, which is no use to people travelling to and from work at peak hours.

It would help many young people if the cost of journeying to and from work were treated as a legitimate business expense and could be deducted from taxable income.  The proposal is that for those under 25, the ones who qualify for a young person’s railcard, they would be allowed the cost of their commuting to and from work as a tax-deductible expense.  This would, of course, mean that the Treasury would receive less tax money from them.  But there would be gains, too, in that it would make work more attractive and would result in more young people in work and off benefits.  Furthermore, the increased spending power this would give some young people would increase the other taxes they paid to HMRC.

Someone in London starting out on perhaps £13,000 a year might currently spend almost £2,500 on an annual season ticket for London’s Underground zones 1-6.  If this were tax deductible, it would take them below the threshold and out of income tax altogether.  Given the government’s current commitment to raising the starting threshold of income tax to the level of the minimum wage, this would be of help to even more people in the future.

What is true for travel to and from work in London is true for other cities, albeit often on a smaller scale.  Living in city centres tends to be more expensive than living on the outskirts.  Young people are caught between the high rents of central accommodation and the high travel costs incurred by living further out.  Although yearly season tickets can reduce the cost somewhat, many young people simply cannot afford the capital outlay it would take to buy one, and have to settle for monthly or even weekly tickets.  Making commuting costs tax-deductible for people aged under 25 would be of immediate and practical help.