The Window Tax
It was on July 24th, 1851, that the hated Window Tax was finally abolished. Introduced under King William III, it was not intended to hit poor people, and exempted cottages, but was designed to be in proportion to the wealth of the taxpayer. An income tax was thought too intrusive, because the government had no business knowing how much people earned. The Window Tax was initially levied in two parts. People had to pay 2 shillings annually (a tenth of a pound) per house if they had fewer than 10 windows, 6 shillings if they had between 10 and 20, and 10 shillings for those with more than 20 windows. In current values, 2 shillings then would be worth about £13.50 now.
Of course, taxes change behaviour, and dynamic models must take this into account. The tax did not raise the hoped-for sums because many people responded to it by bricking up some of their windows in order to avoid it. Visitors to Britain stare in fascination at some of our old houses, noting that where there was clearly once a window, there are now bricks or plaster. Sometimes this can be seen in whole rows of terraced houses. New houses were built with fewer windows to avoid the tax.
In Scotland a Window Tax was introduced after 1748. A house had to have at least seven windows, or a rent of at least £5 to come under the tax. When it was increased in the 1780s, some Scots opted, instead of bricking up windows, for the less costly recourse of painting them black, with a surrounding white frame. These were known as Pitt’s Pictures, after the prime minister of the day, and can still be seen in some places.
The Window Tax was unpopular, because it was seen by some as a tax on "light and air." The tax was increased many times, especially during the wars with France, but it was halved by the reforming administration of 1823, and ended altogether in 1851 after popular agitation.
It does provide a salutary lesson for those who would levy taxes. Increases in tobacco duty might be intended to raise money or to make people smoke fewer cigarettes, but they also encourage smuggling. Increases in alcohol duties might be for revenue or to cut alcoholism, but they also lead people to opt for cheaper booze, and in Scotland, perhaps even for opioids.
Stamp duties on house purchases result in fewer transactions because people stay put in order to avoid it. This leaves the elderly staying in larger homes than they need once their children have left, leading to a market shortage of homes suitable for young and growing families. There is a point at which income tax increases produce a fall in revenue as people put in less work and use tax-shelter schemes to avoid paying them. Higher corporation taxes lead corporations to locate elsewhere, and higher capital taxes lead people to move it beyond the reach of the tax man.
A ruling of the United States Supreme Court stated that "The legal right of an individual to decrease the amount of what would otherwise be his taxes or altogether avoid them, by means which the law permits, cannot be doubted," and a judicial ruling in the UK declared almost a century ago that the law did not require a person to pay the maximum tax if they could avoid doing so.
Two things in particular irritate those who would spend our money as they wish rather than as we wish. One of these is tax competition, which gives people the option of moving assets and earnings to lower tax environments. And the other is the ability of people to modify their behaviour in order to escape the incidence of taxes levied upon it. The history of the Window Tax is a good lesson.
To entirely miss the point of NHS privatisation
Well done to The Guardian here for really missing the point of NHS privatisation. Their numerical complaint seems odd to begin with:
In some sectors the proportion of private spending is many times the overall average of 7.3%, with 44% of all spending on child and adolescent mental health going to private providers, and 30% of mental health budgets overall.
And as far as we know about these things 100% of GP services are contracted out and always have been. Shrug. As ever, the question is what is best done inside a command and control organisation, what best contracted out to the market on cost, efficiency, specialisation grounds? You know, the Coasean question about why we even have production organisations at all?
But it’s this that irks:
Evidence that private providers are failing in their duty of care to vulnerable young people is mounting. In April, Priory Healthcare was fined £300,000after pleading guilty to criminal charges related to the death of Amy El-Keria. Another of the company’s hospitals is set to close after being rated inadequate. While poor practice is not limited to private providers, on accountability and transparency measures they fall far short.
No, that’s the wrong way around. On accountability and transparency the market wins, hands down.
How many NHS wards or hospitals have been closed down because they turn out to be terrible? Or inadequate, or a bit not very good? The answer, as we all know, is none. How many private sector things get killed off for being a bit not very good?
Well, that’s the point, isn’t it? One thing the market is inordinately good at doing is pushing out, bankrupting, closing, those things which, by any absolute standard are pretty much fine but which also happen to be just worse than others. Nothing particularly wrong in that absolute sense with House of Fraser, varied spinning mills, that NHS sandwich maker. They were just not quite as good as others at doing those things so bye bye and off they went.
Yes, we talk about how markets increase productivity, quality, lower price and so on. But they do these things through competition. That is, by killing the businesses which aren’t as good as the others. Which is a great deal more accountability and transparency than we get from a tax funded monolith like the NHS, isn’t it? Stafford Hospital is still in business even if it’s called County Hospital now. The Priory’s place, on the other hand, is out of business entirely for being a bit not very good. That’s pretty accountable there.
Banning foreign words
On July 23rd, 1929, the fascist Italian government on Benito Mussolini officially banned the use of foreign words in Italy. The aim was to “Italianize” the culture and purge it from foreign influences. Actually, most people then spoke regional languages there, and when Mussolini had come to power in 1922, only 12% spoke Italian. The aim was to get the words of foreign languages out of use, but many regional languages were lumped in as well.
New Italian words were invented to replace the foreign ones, and a huge industry sprang up to dub foreign films into Italian, an industry that still thrives. Part of the problem was that the Italian alphabet is five letters shorter than ours, but some of the foreign words brought them in.
France has tried the same for many years with its Académie française acting as a language police to seek out and replace Anglicisms that creep in over the years. I remember them telling me that le jumbo jet had to be replaced by le grossporteur, and that l’hovercraft must become l’aeroglisseur. It didn’t work, of course. They remain attached as ever to le weekend, when they might indulge in le jogging, or perhaps le camping. It is particularly hard for them to resist English and American words surrounding new technology.
The English language has had no such qualms, eagerly lapping up a plethora of foreign words every year. Some are from America, from whence came gadget, gimmick and maverick, among hundreds of others. Some come from France, a veritable dossier of etiquette, and coupons for restaurants. The UK's colonial past enriched it with words from India and Africa, which we happily use as though they came over with William the Conqueror, as hundreds of words did.
We regard English as a living language, changed day by day as usage changes. Some we resist for a time, but they settle in if people find them useful. It's obviously helpful to have a word for each number with an extra three zeros, so the English billion (meaning million million) has gone, and now means a thousand million following American usage.
The English language is rather like English common law, made more by usage then prescription. We have rules of grammar, but we don't learn them from books; we pick them up instinctively as children, by listening to how people use the language. We have rules of meaning and pronunciation, but we acknowledge that they change over time. It is part of the joy of English that it can adapt itself and meet new needs by new uses.
Yes, indeed. We do cultural appropriation very well, only we call it assimilation. It is a tribute to other countries that we take in their words, just as we take in their foods, their fashions, and even their people. Mussolini and the Académie française do it differently, but to us they can seem like latterday Cnuts trying or order back the tide of history. We prefer to absorb good words from others, just as we absorb good ideas. It makes us richer.
John Harris' little misunderstanding - trade is a technology
John Harris wants to tell us all that the right wing just don’t get how difficult this automation, AI, the robots taking all the jobs thing is going to be. He then contrasts this with the attention paid to trade and the terms upon which it happens. This thought having a certain problem to it:
So far, technology has not been one of the favoured themes of the western world’s populists, who are still much keener on talking about work and prosperity in the context of globalisation, trade and such supra-national institutions as the EU. But Frey’s book holds out the prospect of these politicians sooner or later floating the idea of somehow slowing the pace of automation so as to protect their supporters. History offers lessons here: given the convulsions of the industrial revolution led eventually to such liberating, job-creating innovations as mass access to electricity and the internal combustion engine, to do so would threaten things that, in the long run, will surely be to everyone’s benefit. Clearly, any convincing answer to technological disruption lies not in trying to deny the future, but coming up with the kind of ameliorative social programmes – housebuilding, huge changes to education, either a universal basic income or a system of basic social rights – that might both protect people and allow them to make the most of huge change. But when do you hear Trump, Johnson or Nigel Farage talk about any of that?
We don’t speak for those politicians of course. But as David Friedman has pointed out trade is just a technology. His example was, if only we had a machine that could turn corn into cars. Which, of course, we do (or did, when he composed the thought experiment). Japan. The US sent corn to Japan, it got back cars. That’s a technology for turning the veggies into the vehicles.
The point of the story being that there’s no real useful distinction between the two. Automation and trade are just two different flavours of the same thing, technologies.
As to what we do about them both of course the answer is the same. Let them play out and yes, as Harris suggests, then deal with the bits of the results we don’t like in the aftermath. We do already have a welfare state of course and while we might spit feathers about the specific details of it we’re not suggesting that there won’t be one.
We would though insist that we think hard on “surely be to everyone’s benefit”. Because yes, the increased productivity that comes from advancing technology - whether of the robot, AI, automation or trade flavours - is exactly what makes us all richer and yet richer again. Just as the last 250 years of it has got us to this peak, the richest human beings ever.
So far.
When Roosevelt failed to pack the Supreme Court
Although Franklin D Roosevelt is rightly hailed as a popular hero who led America through Word War II, there were darker sides to his presidency, including a blatant bid to pack the Supreme Court with his supporters. He wanted to expand the court to outvote the justices who were blocking some of his New Deal legislation because in their eyes it violated the Constitution they were sworn to uphold. On July 22nd, 1937, the US Senate voted down his Judicial Procedures Reform Bill by voting 70-20 to send it back to committee, where the controversial innovations were deleted from it.
Although the Judiciary Act of 1869 had stipulated a Chief Justice and 8 others to make up the Supreme Court, Roosevelt suggested that because this wasn’t in the US Constitution, Congress had the power to change it. He wanted power to appoint extra justices up to a maximum of 6, to supplement the existing 9 members when any failed to retire on reaching the age of 70 years 6 months. The aim was to add justices to outvote those striking down some of his New Deal Measures.
Although he unveiled it in one of his fireside chats and sought popular support, the public remained hostile on balance after brief initial backing. The President claimed that the Court needed more members because it “was having to decline, without any explanation, to hear 87% of the cases presented by private litigants.” Chief Justice Charles Evans Hughes publicly denied this, claiming that for several years they had been hearing cases with 4 weeks.
Democratic committee chair Henry F. Ashurst delayed hearings in the Judiciary Committee, holding the bill in committee for 165 days, contributing to its ultimate defeat. The Republican National Chairman, Henry Plather Fletcher, suggested that “an administration as fully in control as this one can pack it [the Supreme Court] as easily as an English government can pack the House of Lords." He was right, in that the threat to do this has been used several times in the UK to secure the compliance of the Upper House.
Although FDR lost out to his Chief Justice, who was backed in Congress by the President’s opponents, FDR did, by staying in office 12 years, eventually get to appoint 8 of the 9 justices. However, it was the vote in the Senate on this day in 1937 that is reckoned to have saved the independence of the judiciary.
What we observe in history is that if the executive acquires this kind of power, it will eventually use for to get its own way on trivial, everyday matters, in addition to the vital ones used to justify the power. The Parliament Act that reduced the delaying power of the UK’s House of Lords “in cases of vital national emergency,” was used by Tony Blair to ban fox-hunting. The universal lesson is that in a democracy, you don’t acquire extra powers that you are not happy to see the other side use at a later date. President Trump has made use of the Executive Orders, and the reduced majority needed to confirm judges, that were the hallmarks of Barack Obama’s administration.
Organisations do indeed age into senescence
An interesting point made by those who might know. Apollo veterans stating that Nasa is simply too old a, too bureaucratic an, organisation to be able to get someone back to the Moon.
Nasa may be too old and too bureaucratic to reach the Moon within five years, astronauts who flew on the Apollo mission and members of mission control have warned.
One of us has had mild business dealings with the organisation and light on its feet is not how we would describe it.
“As you get older things change, you don’t get things done as fast, and plus the management environment in Nasa is bureaucratic, much more so than it was during Apollo.”
A C Northcote Parkinson would have pointed out, this is only an example of a more general phenomenon. Organisations do become encrusted with bureaucracy as they age - that just what happens in human organisations. Which is why that market system is preferable. Simply because it contains within it the euthanasia system for those organisations which have become too so encrusted to be efficient.
The varied private sector space companies - those of Jeff Bezos and Elon Musk only being the better known - are feeding from the same basic technological trough as Nasa. Everyone’s got access to the same general state of knowledge about rocketry. But they are delivering the goods rather more cheaply. Which is simply another example of the same basic truth.
The conclusion here being that getting government to do things would be greatly more efficient if we also had that culling process, one quite as vicious as the marketplace. Say, every bureaucracy must be wiped out, the land ploughed with salt, every 40 years or so.
Quite, it’s not going to happen, is it? Thus, in the name of that efficiency we should instead not build the bureaucracies to do things in the first place….
One small step for a man
At 02.56 GMT on July 21st, 1969, Neil Armstrong made the first human footprint on the moon, followed shortly by Buzz Aldrin. The ancient dream had been realized. 12,000 years after we crawled out of those caves, not even a single tick of the astronomical clock, we set foot upon another world. The Wright brothers’ first heavier than air flight, for a distance shorter than the wingspan of a 747, took place in December 1903. Within 66 years men had crossed a quarter of a million miles of space to walk upon the moon.
President Kennedy’s famous speech of September, 1962, had challenged America to achieve the goal “before this decade is out.” America, a nation of pioneers, could once again choose to make its own destiny instead of meekly falling in with whatever the future might hold. His country accepted that challenge, and in a decade of innovation, practised and perfected all of the techniques that would be needed to succeed.
I was in my 20s in that thrilling decade. We watched first the Mercury flights, then the Gemini ones, and finally the Apollo series. I stayed up, as did millions across the world, thrilling to those words, “Tranquility Base here. The Eagle has landed.” It was an event that united the world. There was a sense of species pride, that human beings had undertaken so difficult and dangerous a voyage of exploration, and had succeeded. We felt, indeed, that it had been “one giant leap for mankind.” If we could go to the moon, we could do anything.
The project’s costs drew some criticism, in that the money could have been spent on social housing, just as Queen Isabella could have spent her money on social housing instead of funding the explorations of Columbus, and Manchester City Football Club could be closed down, and its players sold off to fund social housing. Every achievement of humankind, be it artistic, scientific, engineering, exploration or adventure, could always have had its funds diverted instead to promoting social equality. That way we would achieve nothing, not even social equality.
There was a Cold War to be won, and the US moon landings played a part in undermining Communist morale and the belief that history was on their side. They played a part in letting us see our world as a whole, and realizing how tiny a part of the universe it occupies, and how fragile it seems.
To me one of the most telling lines from the Apollo programme was the observation made, looking at the blue and white globe of the Earth, that “Everything that ever happened took place down there.” That was where the dinosaurs were wiped out by a cosmic collision after a reign of 250m years. That was where primates first stood erect. That was where the pharaohs built pyramids and where Greeks fought Trojans. It was where Caesar was assassinated and Napoleon was defeated. It was where, more recently, Hitler, Stalin and Mao murdered their millions. It all happened on that tiny blue marble lost in the vastness of space.
It gave us a sense of being one world, and the hope must be that the anniversary of the first landings will rekindle the feeling that we share this planet. There are signs that the event is already rekindling the drive for adventure and discovery that will take us further into the exciting unknown.
How the minimum wage creates insecure jobs
We hear much about the precariat these days. People stuck in flexible jobs with no real security. We also hear much about how successful the minimum wage has been. No bad effects upon the labour market at all. At which point people should check that first sentence again.
For of course security of employment costs the employer money. Thus this effect comes into play:
Is the rise of ‘atypical’ work arrangements – such as self-employment, freelancing, gig work and zero-hour contracts – a result of workers wanting such jobs or because they have no other choice? This column reports evidence from the UK and the US that while atypical workers may like flexibility, they would prefer a steady job. Indeed, workers would agree to earn less in order to increase their employment security.
What’s the thing a minimum wage won’t allow? Making such trade offs about lower wages and higher security when in the presence of that wage floor.
Total compensation is what interests the employer and if some certain part of it - say wages - is mandated then the bite of low wages has to come out of some other part of that compensation package.
To insist that all precarity is only the result of the minimum wage would be to go too far. But we will insist that some goodly part of it is about exactly that. And since some workers at least would happily trade lower wages for higher security - the minimum wage floor not allowing that - then the minimum wage itself is utility destroying for those low wage workers.
Just another reason why the only correct minimum wage is £0.00 an hour of course.
Lord Reith, paternalist of the airwaves
The Scottish Director-General of the BBC, John (later Lord) Reith was born on July 20th, 1889. His personality was stamped on the BBC, giving Britain its tradition of public service broadcasting. The BBC enjoyed a monopoly of both Radio and TV until 1955, when commercial television in the shape of ITV began broadcasting. Its radio monopoly lasted until 1973.
Lord Reith was raised into a strict Presbyterian family, and not only retained strong low church convictions, but sought, through the BBC, to impose them on the nation. While he was its head, the BBC stayed off the air on Sundays until 12.30 pm, so that people could attend church, and after that broadcast only religious programmes and classical music to keep the day serious. BBC staff who were found engaging in liaisons were fired, and anyone going through a divorce risked a similar fate. Reith had the air of a man who didn’t want people to enjoy themselves, and this rubbed off on the early BBC.
He strongly opposed commercial broadcasting, saying in the Lords at the time, “Somebody introduced Christianity into England and somebody introduced smallpox, bubonic plague and the Black Death. Somebody is minded now to introduce sponsored broadcasting.”
He was convinced that broadcasting should be a public service to educate the masses. He described the BBC's purpose as being to inform, educate, and entertain. In 1955, long after he had left, the BBC banned a Frank Sinatra song for containing the words “Miss Frigidaire” (advertising), and the 1954 Johnny Ray hit, “Such a Night” (sexual innuendo).
The BBC became the darling of the highbrow and the upper classes, delighted that less sophisticated people had to pay taxes and licence fees to support their own more refined tastes. The Reith legacy was one of paternalism, in which ordinary people had dished out to them what their betters thought would be good for them. At its best, Radio 4 (then called the Home Service) was civilized and urbane, presenting clever word game programmes that were half a league better than anything other nations, including the US, could produce.
Reith exulted in this. Radio news presenters had to wear black tie and dinner jacket, even though no-one could see them. The point is that the news was serious, and needed the right attitude. Lord Reith’s reputation was not helped by later disclosures from his diaries that he admired Hitler and Mussolini for their “efficiency,” or from his daughter’s revealing that her father in the 1930s “did everything possible to keep Winston Churchill and other anti-appeasement Conservatives off the airwaves.” Reith’s style was at once patronizing and paternalistic.
He detested Churchill because the latter never gave him a job that met what he thought were his abilities. He wanted to be Viceroy of India, which he would no doubt have governed with the strict authoritarianism that characterized his direction of the BBC. It retains to this day the marks of Reith’s tenure, with a patronizing culture that imposes a political correct woke agenda as if it mattered. It likes to regard itself as the guardian of the public conscience, but its remorseless anti-Brexit, anti-Trump, anti-Tory, anti-business agenda makes it more like liquid Guardian. Like Reith, it arrogantly supposes that it knows best, and regards it as only right that public money should be used to advance its view.
Reith in his diary referred to “that bloody shit Churchill.” No doubt history, looking at the personality, career and legacy of the two men, will decide which of them best deserves that epithet.
Scotland's drug deaths problem is a difficult one
We’re normally in entire agreement with Simon Jenkins on the subject of drugs and their legalisation. Get them legalised so that people can ingest what they wish - the civil liberties argument - and so that what they do is of known purity and dosage - the pragmatic one.
However. Scotland has just released figures showing a significant rise in opiates related deaths. Jenkins suggesting that this should be the trigger for further devolved action. Scotland should move closer to that legalisation model. Yes. However, matters are, as always, complicated:
Likewise, a campaign against alcohol-related deaths exploited delegated powers to levy local taxes. A rise in minimum retail prices has driven Scottish alcohol consumption to an all-time low. Both these initiatives were classic examples of local discretion leading to reform, where central government policy was stuck in a political rut.
Yes but. This is a surmise but one we think will be seen to be correct when matters are fully analysed. That reduction in alcohol use as a result of minimum pricing is the cause - or a leading cause perhaps - of that rise in opiates related deaths.
That people use opiates and alcohol together is not a surprise to anyone. That opiates users are likely to use the cheapest alcohol possible should also not be a surprise. A random bottle of industrial cider has gone from perhaps £2 to £5 as a result of the minimum pricing. This being the very aim of it, to stop people swigging cheap booze to excess.
However, people do substitute. And the rise in opiates related deaths is really driven by a rise in benzodiazepines (valium and cognates) plus opiate usage. The margin for error here in dosages is very small, the use of both classes of drugs - not just heroin and valium, but methadone as well, plus any of the benzos - will indeed cause a rise in deaths from respiratory failure, overdoses.
There are two possible causes for this rise in the joint drug use. One that a new generation of street benzos has appeared. The other that addicts are, in the face of those higher alcohol prices, substituting to those street benzos. We would probably claim that the appearance of the new benzos is caused by the greater demand given the alcohol price rises. Claim only, not insist, as we all wait for more evidence.
It’s thus possible to claim, and we would, that the rise in alcohol prices is killing people, as those addicts substitute away from the relatively save booze to the very much less safe benzos. We’re willing to be persuaded either way by good evidence of course.
We’d only make the one firm prediction about all of this. It will be near impossible to get a proper investigation into this because everyone knows that minimum alcohol pricing is the right policy implementation, don’t they? Scientific investigations of manias being rather hard to launch and no one believes the results anyway.