UK riots

The riots in the UK are not pleasant, that much is clear.  Seeing such anger and hatred is never nice, but when this is happening to innocent people by a bunch of rioters who just feel bored and want to get kicks it is even more frustrating.

In this context, I find the comments of Nina Power in the Guardian not just distasteful, but sickening.  She lays the blame for these riots not on the shoulders of selfish individuals, but on capitalism and on society – she makes it sound as if the rioters are the victims, and that they are rising up to free themselves of some overbearing “system” that has trapped them.

This type of comment upsets me for two reasons:

  1. It demeans the struggle of those who are genuinely poor, of those who are genuinely oppressed – countries where a dictator presses down the rights of man for his own selfish gain.
  2. It dishonours the actual victims from these riots, and acts as if the rioters have cause – truly, why would someone who wants to fight against injustice do so by causing injustice?

By asking us to “step back” to look at the issue, she wants to provide a top-down view of what is going on in London, and now in other parts of England.  She wants to blame the structure of society, and act as if this rioting is an act of desperation by people who are victims to this system.

In truth, if we are going to step back to understand the issue we need to start from the bottom-up – these individuals view themselves as victims, in a large part because people like Nina Power tells them they are.  Given that, they don’t feel any obligation to take on responsibility – or to even ask themselves how their own selfish actions have an impact on those around them.

Truly, it is not the free market system we have that requires wholesale change, it is the victim mentality of people in society that needs to change – we can only have a “better society” when the individuals within it are willing to take responsibility for their actions.

Do I believe there is injustice and inequity within society, within institutions, and within government – yes.  But the solution needs to be built from individual responsibility and mutual respect, not the arbitrarily defined institutional structure suggested by intellectuals and columnists.

The funniest part about the UK budget 2011

Since I am the UK correspondent for TVHE I thought I had better contribute something to the blog. Then I stumbled across this gem from today.

One of the centre-pieces of the budget was the reduction in fuel tax (it has had a lot of media coverage). Not only was the fuel tax increase cancelled, fuel tax was in fact decreased by 1p per litre. According to Chancellor Osborne, this move would lead to motoring costs falling for families and businesses.

Given the budget was a fiscally neutral one, in that all additional spending/tax cuts come from spending cuts/tax increases in other areas, how is this cut in fuel tax being funded?

By an increase in taxes on North Sea oil production, from 20% to 32%.

I’ll leave it to the reader to think about what effect this increase in production tax might have at the petrol pump.

Words of wisdom on St Patricks day

Happy St Patrick’s day all.

On this fine day, there is a song I’d like us all to remember – Seven deadly sins.  My favourite part of the song goes:

Some say that drinking’s a sin
But a gargle is fine now and then
For drinking has been in this world
For ever and ever amen

No if it wasn’t legal then the lawyers they would sue
And the prison would be full of folks who had a drink or two
And if they didn’t like it then away the girls would run
And if it wasn’t plenty the poor folk would get none

If you’re not sure, have a read over a few more of our posts on the issue(*, *, *).  Or for more advice from the Dubliners go here.

See you all next week!

Financial transactions tax: Don’t forget about incidence

Economist’s View has again come out in favour of a financial transactions tax.

Now I believe the version of the tax that Mark Thoma supports is different from the one we hear about from the more left wing parties in New Zealand (see here and here and here) – specifically, it is supposed to only be on trade that is seen as ‘high volume speculative financial trade’ … ultimately, it is a more traditional Tobin tax, rather than the tax on all financial transactions that has been raised here.

Even so, I am convinced it is subject to the same criticism – namely that:

  1. the incidence of the tax is likely to fall in unintended places,
  2. there is no reason to think volatility will decline following the introduction of such a tax
  3. there is no reason to think that the likelihood of “exchange rate bubbles” will decline following the tax – in fact by blunting the market price it may increase the likelihood of exchange rate misalignment
  4. there may be practical difficulties with such a tax – eg tax evasion by changing the name of purchases, buy commodities as a proxy for currency etc.

In truth, a financial transactions tax appears to be an indirect means for trying to achieve any goals – while I see why we may want to increase international co-operation/discussion regarding variables that impact on other countries (tax, exchange rate policy, monetary policy) a FTT/Robin Hood tax does not appear to be a silver bullet – or even a useful policy solution.

Update: Patrick Nolan from Reform discusses this in more detail – given that there is a sizable push towards this sort of tax over in the UK.

A step too far: The case against pursuing direct capital/trade/currency controls

To start off with I have to admit I like Bernard Hickey.  I like the fact he has got out there, written about New Zealand economic issues, and pushed to add an open debate type platform to the discussion regarding the New Zealand economy.  As a result, I may have not been critical enough when I read his posts in the past – as I did not see this coming.  In truth, the calls for exchange rate, trade, and capital controls is a massive step too far in what could well be the wrong direction.  Let me talk about the points Hickey has raised:

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A note on moral vice

Apologises in advance for this heavily value ladden post.  I am touching on infinitely busy (again), I’m very tired, and I’ve been listening to “too much” Irish music.  As a result, I’m posting what is in my head rather than proactively trying to find an economic issue to write “objectively” about – as this is easier, and it still involves getting a post done 😀

When forming my value judgments regarding “moral vices”, I like to listen to the Dubliners.  Having a proud Irish heritage helps in this regard, and I feel that they raise a number of important points regarding addiction to common commodities I can relate to (alcohol, women, cigarettes, roving).

Listening to their songs recently, two underlying points suck out – points I felt would be useful in informing part of the debate on alcohol regulation.

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