July 20, 2009
Is Red Toryism the Threat the Left Should be Focused On?
I”m back from China. I may blog about my experiences in time, but there was so much to take in that I need to let it all settle. In the meantime I’ve been catching up on the recent UK blog activity, and hence was inspired to give you this:
Sunny Hundal and others at Liberal Conspiracy have recently been discussing Red Toryism, the embryonic brand of conservativism expounded most notably by Phillip Blond. Sunny and co have raised particular concerns that Red Toryism could supplant the left indefinitely. This is (roughly) because it combines a small-c conservative preference for tradition and gradual organic change with a suspicion of corrosive free market economics and the attendant breakdown of social relations. In other words, areas long assumed to be the preserve of the left could be appropriated by Red Tory rejection of the Thatcher settlement. Red Toryism, it is feared, could steal the best leftist clothes and appeal to everyone from the centre to the reasonable-right, thus crowding the liberal left out from power indefinitely.
But Red Toryism remains embryonic. Blond is still its only established (and respected) mouthpiece, and as yet it is a set of interesting ideas rather than a solid ideology. As fascinating as I find Red Toryism, I can’t help wondering if a more serious threat to the left comes from the decidedly un-reasonable right: Libertarianism.
We bloggers like to talk ourselves up. Some claim that the “dead tree press” has had its day, and point to the Damian McBride affair as proof that blogs are the future. But if this is true, then the left should be worried.
As far as I am aware there are no thoroughgoing Red Tory blogs. The same cannot be said of Libertarianism. Sites like Old Holborn, Devil’s Kitchen and Mr Eugenides attract a massive readership between them (apparently being the 9th, 15th and 17th most-read blogs respectively), and all three appearing in the PoliticsHome.com blog live-feed. Although Guido Fawkes is probably best described as a political arsonist (h/t to Tim Ireland for the label), the visceral attacks on the state and the political class by Paul Staines fit closer to the ‘tear-down-the-state’ attitude of Libertarianism than any other grouping. And that’s not even factoring in Libertarian tendencies to be found on ConservativeHome. There’s a lot of Libertarian thinking and writing going on out there.
As well as having an established and large on-line readership, the Libertarian community is incredibly pro-active. Write a blog about Libertarianism – or even just about tax or government spending generally – and chances are you’ll get Libertarians on the comments thread within hours. Some of these will make efforts to engage in rational and mature debate (a chap called Dan regularly makes highly sophisticated critiques on my blog, and often remains more polite and courteous than I manage to be). But many will not. Richard Murphy recently attracted Libertarian wrath, and had delete half of the comments he received due to their vicious nature. After writing about progressive taxation a few months back, one prominent Libertarian blog described me as a “maggot” engaging in the politics of selfishness. (It’s lucky for the blogger in question that I’m not the sue-ing sort, because if I was I’d be laughing all the way to the bank).
Part of the reason Libertarians are so pro-active seems to be because so many of them are unbelievably angry. It pours out of their blogs and comments; a visceral loathing of the state, a righteous indignation at the present composition of the world which animates them to great levels of energy. For those of us on the left, this can appear confusing and strange. After all, the world of Libertopia would – by our estimates – be a nightmare realm of poverty, inequality and destitution for all but the minority elites who competed with greatest fortune in the game of dog-eat-dog.
For its worth recalling a straightforward consequence of some basic Libertarian commitments. Libertarians see tax as unjustified coercion by the state. Accordingly, they would allow only taxation which was required to provide a “minimal” state whose role would be to provide defence, police, courts and the enforcement of contracts. No tax above that would be levied. This means there would be no provision of healthcare by the state, for that would require ‘unjustified’ and ‘coercive’ taxation faciltating more than a mere minimal state. Healthcare in Libertopia would either be provided by private companies, or by charitable organisations. A person too poor to go private and unlucky enough not to receive charity would be left on the roadside to die. This is because Libertarians think it is worse for the state to “coercively” tax people in order to provide a health service than to allow the poor to die on the side of the road. Hence they plug for the latter over the former.
This is not, it must be noted, an attempt to smear libertarians with emotively shocking examples: it’s a logical outcome of their political beliefs, which honest Libertarians will, and do, accept. If you don’t believe me, Peter Hawkins (a former Libertarian, no less) has argued the case very well here.
For those on the left, such views appear so outlandishly whacky, so extreme, that two reactions are probably prevalent. Firstly, abject horror that anybody could hold such views (a fairly natural response to something so antithetical to one’s politico-ethical commitments).
Secondly – and more importantly – a certainty that such outlandish and extreme views could never gain traction outside of the Libertarian community. After all – we think to ourselves – surely it would be electoral suicide for a party to go to the country advocating the abolition of the NHS (as well as state schools, public roads, street lights and everything else provided by government money)?
The problem, of course, is that whilst the advocacy of such extreme policies would indeed be electoral suicide, Libertarians are too clever to be suicidal. Hence Andrew Withers of the UK Libertarian Party has commented that:
One of the greatest problems that a Libertarian has is trying to convey the message that Libertarians would not close all of the hospitals in the country, and the dead, dying and ill would be lying in hedgerows and/or the work house.
(Of course, as Peter Hawkins shows [follow link above] honest Libertarians should bite the bullet and admit that they think it is better for poor people to die in the streets than for a state to levy coercive taxation to pay for their healthcare. But this raises a different issue about electoral tactics vs. intellectual purity which I’ll leave alone here).
Rather than making politically suicidal attacks on the NHS or free education, Libertarians are focusing their energy in more achievable areas, and tax is top of the list. Libertarians typically advocate a flat rate tax, i.e. everybody paying the same rate, regardless of whether they are a pauper or a millionaire. (In other words, advocating the Poll Tax as the only justified tax error deleted, h/t to Anton for pointing this out). Typically, Libertarians are also viciously opposed to inheritance tax (which is somewhat peculiar, given that you’d have thought their instincts for free-market competition would lead them to agree with Winston Churchill’s remark that estate tax is “a certain corrective against the development of a race of idle rich ”).
Libertarians focus on these areas, however, because they correctly view them as achievable short-to-medium term goals which, if achieved, will pave the way for more drastic state-smashing policies later on.
And it seems to be working. George Osborne’s rather esoteric comments here can certainly be read as laying the groundwork for advocating a flat tax regime. The Tories are still pledging to raise inheritance tax thresholds to £1 million, and they have a precedent for success after the Bush administration in its first term (and with Libertarian backing) took considerable steps to abolish American estate taxes on the wealthiest 2%.
Whilst Obama may be in the White House, it’s Cameron’s Tories who are heading for Downing Street – and its Libertarian arguments that are filtering through into Tory thinking about tax (and I would add, spending cuts and slashing the state more generally). So far I don’t see any Red Tory ideas being adopted by the Cameronites
Red Toryism may be emotively less abhorrent to leftists than Libertarianism, and we may feel threatened by it’s clothes-stealing potential. But Red Toryism is still in early development: Blond’s is a considerable intellect, but he lacks a wide-ranging network of support reproducing and expanding his ideas, feeding them into the mainstream right. Red Toryism may have gotten a lot of attention, but it’s still largely a one-man-band in its early stages.
Libertarianism, by contrast, is a permanent, massive and well-established fixture of the on-line political debate which is increasingly shaping real-world politics. Libertarian blogs are well-read, and Libertarian advocates are extremely widespread throughout the ‘blogosphere’. Their ideas appear to be permeating the rhetoric of an inbound party of Government.
Red Toryism may seem threatening because it could arrogate much of what the left has traditionally – and lazily – assumed to be its preserve. But Libertarianism’s growth and virility is what should really concern us. For Libertopia – or anything approaching it – is fundamentally and violently antagonistic to all that liberal leftists believe in. Libertarianism is an ideology which seeks to revolutionise society by stripping away the state almost entirely – and in the process stripping away all that the left thinks the state can and should achieve in the name of fairness, equality and social solidarity.
In terms of established political strength, impact on the political discourse, and antagonism towards everything the liberal left holds dear, it’s not Red Toryism we should be worrying about.
July 6, 2009
Away
Tomorrow morning I’m going to China for 10 days.
It’s not a holiday. I almost certainly won’t have the time or capacity to blog.
Normal service to resume thereafter. Hopefully with tales, observations and photographs.
Logic, Section 28 and Homophobia
Over at Liberal Conspiracy, Don Paskini has a good post up. It’s about a trend in Tory grass root thinking offering what might be called a “revisionist” view of Section 28, the piece of legislation the Tories introduced (which Labour repealed) banning teachers (and Local Authorities more widely) from “promoting” homosexuality.
For example, over at Conservative Home, the blogger Melanchthon has written:
As virtually all of you will know, Section 28 of the Local Government Act 1988 was introduced in direct and specific response to a situation in which gay liberation activists managed to get themselves elected to local authorities and in particular to the Inner London Education Authority. These activists then used their political position to force school libraries to carry literature directed at five and six year old children teaching them that it was perfectly normal to be raised in a family with homosexual parents. The best known of these books was “Jenny lives with Eric and Martin”.
Most people at the time thought (and indeed, I’ll bet most people today still think) that they do not pay their taxes to the local authority so that it can promote alternative lifestyles or force their schools to promote alternative lifestyles[.]
It’s worth having a little think about the reasoning that has to go on behind a statement of support for Section 28 on the grounds that teachers must not “promote” homosexuality.
I’m going to go slow, so bear with me.
First, we note the assumption that “teaching” something is the same as “promoting” it. There are reasons to doubt this is true. At my (state comprehensive) secondary Catholic school we were taught about Judaism and Islam. To say that these religions were not promoted to us is a bit of an understatement.
Secondly, we should note the further assumption that a teacher promoting something is a successful means of inculcating behaviour in students. Again, there are reasons to be doubtful: most teachers promote homework – but most children don’t like homework, and many of them don’t do it. So we have a straightforward example of promotion not leading to necessary successful inculcation of behaviour.
But let’s, for the sake of argument, grant these (very questionable) assumptions:
- Teaching an alternative lifestyle promotes it
- Promoting an alternative lifestyle will cause children to adopt it
What follows? Well, nothing. From those premises alone we certainly cannot get any kind of value judgement. (A value judgement is something like “it is bad that children adopt an alternative lifestyle”). So to get any further, we will need another premise. Something like
3.a It is good for children to adopt an alternative lifestyle
or
3.b It is bad for children to adopt an alternative lifestyle
Adding 3.a or 3.b to premises 1 and 2 imports a value judgement. From either of these value judgement we can conclude:
either
4.a. children should be encouraged to adopt an alternative lifestyle
or
4.b children should be prevented from adopting an alternative lifestyle
Whether one plugs for 4.a. or 4.b will in term determine what kind of legislation one thinks should be enacted (assuming one is in the game of making laws off the back of ethical judgements).
To make this all a little clearer, and to return to the issue at hand, let’s replace “alternative lifestyle” with “homosexuality” [disclaimer, the following is certainly not my view]:
- Teaching homosexuality promotes it
- Promoting homosexuality will cause children to adopt it
- It is bad for children to adopt homosexuality
- Children should be prevented from adopting homosexuality
4 in this case is our conclusion and results in a policy prescription. In such a case the legislative prescription could be Section 28, or something similar.
The point is, to get to the point where you advocate Section 28 as a legislative measure (assuming you are acting for some sort of ethical reason, and not just enacting it on an arbitrary whim) you need to pass through a particular premise. The premise is 3: “it is bad for children to adopt homosexuality”.
Yet the only thing that could inform this would be a belief that homosexuality is in some way bad for children to adopt. Now I’m happy to argue this point, but I don’t think you can consistently say that it is bad for children to adopt homosexuality without thinking homosexuality is bad, or wrong, or evil, or in some way something negative.
Which means being prejudiced, at some level, against homosexuals.
Thus our reasoning is complete: supporting Section 28 because you oppose the “promotion” of homosexuality means, ultimately, being prejudiced against homosexuals.
There’s just no getting away from it. If you support Section 28, at some level you are anti-gay.
July 4, 2009
A Novel Idea
The Cayman Islands like to deny that they are a tax haven. Sure, they have 80% of the world’s hedge funds based with them, and one building in George Town has 18,000 companies registered to it . But those things don’t count, right?
Jersey, another ‘not a tax haven’ (despite operating extensive secrecy laws and imposing zero rates of corporation tax) repeatedly insists that it is a “well regulated, transparent and co-operative jurisdiction”.
I once heard Lyndon Trott, Chief Minister of the States of Guernsey, affirm with great conviction that Guernsey is not a tax haven.
Of course, “tax haven” is a crude term. “Secrecy jurisdiction” is better. This is because low/no tax is only one of the pull-factors that attracts tax evaders, criminals, terrorists, irresponsible corporations and corrupt self-serving national leaders to these boltholes for hot money. More important is the systematic secrecy in banking and trust law that allows all sorts of things to go on that a properly regulated jurisdiction would prevent for the good of its general population (albeit to the chagrin of some in minority wealthy elites).
Yet whenever a territory is accused of being a secrecy jurisdiction, the response is always outraged denial. Clearly it’s understood that being a secrecy jurisdiction is nothing to be proud of. No matter whether the accusation comes from the Tax Justice Network, the Organisation for Economic Co-operation and Development or the President of the United States, denial is the default and automatic response.
So here’s a novel idea. How about the territories repeatedly fingered as secrecy jurisdictions come up with their own definition of what a secrecy jurisdiction is – and why they are not one.
But there’s a catch.
The definition has to allow for two things. Firstly, the jurisdiction in question has to be able to explain why it is not a secrecy jurisdiction, under its own definition. Secondly, the definition has to simultaneously be able to finger other territories as secrecy jurisdictions.
There’s a very simple rationale for this. It’s easy to say “we are not a secrecy jurisdiction” if the underlying position is that there are no secrecy jurisdictions. But if that’s the position, then others are justified in replying: “yes there are such things as secrecy jurisdictions – and by our measure, you are one of them“.
By contrast, it is altogether more instructive if a territory can exempt itself whilst incriminating others.
So what I would like to see is the territories typically fingered as being secrecy jurisdictions explaining why they are in fact not such – but why others are. If they can’t do this, then they should stop denying the charge when others level it.
A novel idea, no?
So come on Cayman, Jersey, Guernsey, the Isle of Man, Belize, Panama, Switzerland, the City of London, Delaware, Turks & Caicos, the Bahamas and all the 60+ rest of you, what do you say?
Hat tip to Richard Murphy for the post that got me thinking.
EDIT: Similar thoughts from the Tax Justice Blog, here.
Indeed, as a Tax Justice Blogger pointed out to me this morning, for the light-hearted among us it may be simplest to skip all the complex definitional stuff and just go for this: “a tax haven/secrecy jurisdiction is a jurisdiction that denies being a tax haven or secrecy jurisdiction.”
July 1, 2009
The Fairness of Inheritance Tax
Inheritance tax is widely opposed. According to BBC’s Newsnight programme yesterday, some 80% of people are opposed to it.
Tapping into the public mood, the Tories say they want to raise the threshold for being eligible for inheritance tax to £1million, after which every pound inherited would be taxed at 40%. (Of course, given the dire state of the public finances, the Conservatives may find this impossible).
Yet last night on Newsnight, Tim Horton of the Fabian Society spoke up in favour of inheritance tax – with impressive success.
Appearing on the slightly silly “Politicians Pen”feature of Newsnight (think Dragon’s Den, but pitching to the former director general of the BBC, a tycoon, etc with political ideas relating to how to deal with the public finance crisis). Horton convinced the panel that the income tax threshold should be frozen at £325,000 pounds. This would mean that as inflation brings more people above the threshold, more people will be eligible for the tax, and the public finances will benefit.
Horton carried the day from a public finance perspective – but he was criticised for his “socialist attacks on the rich”. I thought this was actually unfair, as Horton did no such thing. But it’s a stock charge against defenders of inheritance tax. So the defenders of inheritance tax need a good reply.
That good reply exists, and it consists of arguing for inheritance tax because it is fair, rather than because of a desire to simply penalise the rich. But employing that reply means acknowledging the competing and justified concerns of the anti-inheritance tax proponents.
First, let’s recall the main – and it should be said, extremely plausible and powerful - objection to inheritance tax. Put roughly, it goes like this: people work hard, in part, because they want to build better lives not just for themselves, but for their children. Having a pot of wealth to pass on to one’s children is part of the reason people go out to work, which most people don’t particularly enjoy in the first place. Furthermore, it brings parents a measure of security to know that they will leave their children something, and satisfaction that they are helping their children even when they have passed away. The parent-child bond may be strengthened in important ways as a result. This is good for parents and children.
Let me say that I believe these things are true. But they are not the end of the story.
For when parents leave their children money and/or property, that has repercussions beyond the familial relationship. The bequeathing of wealth, property, money etc creates imbalances in society. It results in some people – those who had rich parents – having more than others. In this world, having more property, wealth and money means (generally) having an easier, better, less stressful and more pleasurable life. That, after all, is why people usually want money, property and wealth.
However (as Tim Horton explained on Newsnight) at present in the UK the top 50% of people own 93% of the wealth, and the bottom 50% own just 7%. That’s some serious inequality.
So point number one: allowing unmitigated inheritance tax can only reinforce this inequality. After all, if the top 50% already have 97% of the wealth, and they can pass it on to their children when they die, then the top 50% will easily continue to keep the top 97% of the wealth.
That, however, is only an objection to inheritance tax if you think equality is important. Lots of people don’t. So we turn to fairness, which the Fabian Society has noted people outside of the left tend to be more interested in.
It is a simple, uncontroversial fact that nobody deserves to be born to their parents. I no more deserved to be born to my middle-class, financially prudent and well-employed parents than Joe Bloggs deserved to be born to a single mother on a sink estate. That’s because birth is a lottery – nobody is responsible for who their parents were.
So the brute fact is, nobody deserves to inherit money from their parents. Why? Because it is a fact of arbitrary chance that somebody was born to parents able to leave them large sums of money, rather than financially imprudent parents leaving nothing but debts.
The fact that my parents worked hard for their money is an explanation for why they should keep it (minus the necessary deductions to the social collective necessary for the upkeep and existence of the society which allows them to work and prosper, namely “tax”). It is not an explanation for why I should get it when they die. I did nothing to earn that money, and I did not “deserve” to be born my parents’ child. I therefore do not “deserve” to inherit their money, wealth or property.
Because I do not deserve that money, wealth or property (having done nothing for it) and because that money, wealth or property stands to make my life go considerably better than that of somebody not so fortunate in the lottery of birth, it is unfair for me to inherit these things. I did nothing for them – so why should I get them?
But that’s not the end of the matter, for there is more to politics and the settling of social distributive questions than just the issue of who deserves what and whether or not distributions are fair. Here we must remember that the anti-inheritance tax proponents have a strong case when they say that leaving an inheritance behind is important to the lives of parents and children; it provides peace of mind, strengthens familial bonds, provides a reason for the general unpleasantness of remunerated work, etc. It is true that these things matter.
The point is that we shouldn’t be trying to play a zero-sum game. The state should be able to simultaneously acknowledge two things.
First: nobody deserves to inherit wealth, property or money – their inheriting these things makes their lives go better than those who were not so lucky in the lottery of birth.
Second: it is important to the lives of people in a free society – both parents and children – that parents be able to leave an inheritance to their children.
These two things need to be traded-off against each other. The state can correct for the first by taxing inheritance. This adjusts for the unfair reward of material distributions allocated by the lottery of birth, and can be used to compensate those who were unlucky enough to be born to parents who couldn’t or didn’t leave them an inheritance. This is fair because receiving inheritance and the accruing benefits is itself fundamentally unfair.
However, the state must recognise that leaving inheritance is important to peoples’ lives. Thus the state must certainly not impose a 100% inheritance tax: people must be allowed to leave something to their children, if their lives are going to go well.
The real question is therefore where to draw the line between these two competing demands. How much unfair, undeserved social and material inequality are we prepared to allow in the name of allowing people’s lives to go well by leaving inheritances for their children?
Personally, I think the threshold is currently too high. £325,000 is an awful lot to receive tax-free because you were lucky enough to be born to wealthy parents – no matter how hard those parents themselves may have worked. I think that this creates considerable and undeserved material and social inequalities, which cannot be justified.
Others will disagree, and will think the threshold should be higher still.
That’s fine. We can disagree about that. The point is, the debate should be a disagreement about where to draw the line between compensating for unfair material distributions, and allowing people to participate in an activity which makes their lives go better. It should not be one side clamouring for no inheritance tax, and the other demanding a 100% rate. Both those approaches play a zero sum game, and that’s not a game we should be playing.
