Tim Worstall

There's a rather sad misunderstanding about corporation tax in the UK at the moment. Everyone seems to think that we've got a low corporation tax here. When we don't in fact: we've got rather a high one. Oh, sure, we've a low headline rate: but that's very much the smallest part of corporation tax. The much more important part is what are the reliefs, the allowances, what can you claim back, what is actually taxable. Which gives us the effective rate:

A little story from the annals of my corner of the weird metals industry. You'll recall all those stories of how the Chinese had cornered the market in rare earth metals. Then the wily Orientals rather scrutably decided to, once they were 97% of the supply, restrict exports, reduce production and rub their hands with glee as they collected monopoly profits. All in all an example of how they had got it right through industrial planning and we in our free market foolishness had got it wrong.

Anti-Dismal, that outpost of economic rationality down under, points out that Steve Keen's rubbishing of standard microeconomics in "Debunking Economics" doesn't actually pass the test, that quite important test, of being correct. My own view is that even if the critique is correct it doesn't actually matter.

It does get very annoying when we've all the usual prodnoses telling us that we must eat our five a day, stop puffing on the gaspers and limit ourself to one small brown ale a week for the sake of our livers. This is all to "save the NHS", or to save the public accounts from the costs of dealing with us cancerous lard tubs as the cirrhosis explodes.

I know that this brings fits of the vapours to the more maiden auntish of the British left but there really is a very good reason why we want to have a more market orientated health care system in the UK: 

We're all well aware of Polly Toynbee's mantra that "We should be more like Sweden". I'm sure at least some of you will be aware of the various times I've made fun of that very mantra. What, you mean we should privatise the fire and ambulance brigades? Have a pure school voucher system? Charge people a (nominal) sum for a doctor's visit? Have a state financed and multiple providers health care system? Switch the national dish from roast beef to meatballs?

One of the odder little corners of economics is development economics. It seems to be where bad lefty ideas go to be imposed on poor people after we've found out they don't work for us. As an example I would offer some of the witterings of Ja Hoon Chang: he says that free trade might be a good idea for rich countries but not for poor. Much better that they have a benevolent government planning everything and fostering infant industry protection and the like.

Good drugs lead to support for the market system. Umm, no, not that sort of recreational pharmaceutical, that's not what I mean. Rather, that the system which produces good pharmaceuticals is an example of how and why a market based system is superior to a planned one. Take this from Corante, discussing Nassim Taleb's view of finance:

Peak Oil is the idea that one day there just won't be any oil left and civilisation will fall over. Or for the more discriminating but no less wrong, that one day we'll be producing less oil than the oil that is demanded and thus civilisation will fall over. The major problem with these and other flavours of the same prediction is that they ignore price. If demand for oil is greater than supply of it then the price will rise. Thus there never actually is a possible position where there is no oil and civilisation falls over.

I've said this before and no doubt I'll say it again. But inequality in the UK just isn't quite what people generally say it is. We're in an unusual situation: we've in London one of the great commercial cities on the planet. The rest of the UK is pretty standard high income European stylee. A goodly part of the recorded inequality in the UK is between these two economies. We can see this in this report on the latest ONS figures: