Pension Funds
The Times
3 April 2007
Sir, There are three points I would like to highlight on the issue of Gordon Brown’s changes to the dividend tax credit regime in 1997.
First, while the “double taxation of dividends” does create distortions in corporate finance, double-taxation or near-double-taxation is quite common around the world, reflecting the difficulty of implementing single taxation of dividends. Few British investors would like to return to the quixotic days of the old advance corporation tax (ACT) regime.
Secondly, despite double taxation, stockmarket swings and pension payment holidays, total pension fund assets have kept pace with the growth of the economy since 1997.
Thirdly, it is impossible to judge whether the change was worthwhile without considering the benefits to the public finances. Without the “prudent” management of the public finances in the first new Labour administration, interest rates would have been higher; there would have been no increases in the real value of the basic state pension; and the later expansion of spending on education and health would have been impossible.
Chomsky
The Daily Telegraph
11 July 2006
Noam Chomsky may be many things ('How big business killed democracy', books pp. 3, Saturday 8 July), but he is no economist. It is true that hourly real wages, as measured, are lower in the US today than in the early 1970s, but it is hasty to blame a 'neo-liberal agenda'. It is no coincidence that the peak in real wages was in 1973 and that they declined sharply during the turmoil following the oil shock. They stabilised under the Reagan administration in the 1980s, when the 'neo-liberal agenda' was surely at its strongest, fell under Bush pere but were stable again under Bush fils. It seems that it helps if you actually look at the data, rather than just wring your hands.
Pro-Test
The Oxford Magazine
Trinity Term 2006
John Coleman ('Are we all "Pro-Test"', Oxford Magazine, no 253) suggests that advocates of animal testing should advance arguments for the absolute superiority of the human race over all other species, in order to justify carefully-regulated medical testing on animals. A fortiori, perhaps he could invite some members of the animal kingdom, other than homo sapiens, to write in with their views on the issue. After all, apparently, we should not commit "speciesism".
Amnesty Lectures
The Oxford Magazine
Hilary Term 2006
This is a somewhat unusual letter of complaint for the Oxford Magazine because I'm writing not to complain about an article, but about an advert, namely the advert for the Oxford Amnesty Lectures 2006 (pp. 3, Oxford Magazine, No. 245, Eighth Week MT 2005).
Specifically, I'm writing to complain about the intellectual laziness of the copywriting of that advert, which purports to be a serious discussion of the forthcoming lecture series. I should at this point say that I am not criticizing either Amnesty itself, the lecture series, or the worthy lecturers. What I am criticizing is the series of bien-pensant cliches that pervades the lengthy text of the advert, over 750 words by my count; a short article in itself!
To take two easy examples, the advert sets up just as many straw men as it claims to demolish, while at the same time showing some stunning intellectual naivety. In the former case, the advert claims that the Taliban's treatment of women is often (wrongly) assimilated to Islam in general, which may well be true, while setting up its own straw man that the 'United States is unlikely to pressurize Israel to withdraw from the occupied territories or wholeheartedly encourage Saudi democracy', which proposition surely has to be argued rather than merely asserted. In the latter case, the article says that 'Nothing is so destructive of civil rights or so conducive to violence as poverty' when there are so many counter-examples of poor countries with little violence, and rich countries with violence, that the question of there being any cross-country correlation between poverty and violence/terrorism is entirely moot (see for example 'Education, Poverty and Terrorism: Is There a Causal Connection' by Alan Krueger and Jitka Maleckova in the Journal of Economic Perspectives, Fall 2003).
Finally, it also grates to see the words 'war on terror', 'terror', 'radical clerics' all given suitably questioning speech marks, while 'state terrorism ... as practised by Israel in Palestine' is not given any such qualification.
Perhaps article-length adverts should be subject to the same editorial standards as the rest of your fine journal?
Comparative Advantage
The Oxford Magazine
June 18, 2004
I have been puzzling a little over your recent article by Christopher Kirwan, and think I can shed some light on the issues using David Ricardo's well-known economic principles of absolute and comparative advantage. In his article, Dr Kirwan stated that undergraduate education is 'the thing we do best among the things we do', and consequently cast doubt on calls for the University to specialize more on postgraduates. However, as David Ricardo would no doubt point out, the fact that Oxford has an absolute advantage in undergraduate teaching does not necessarily mean we should specialize further in it. Indeed, I would suggest that our comparative advantage is in postgraduate education; after all there are many universities in Britain that can provide a first-class undergraduate education, but far fewer that can claim the same for postgraduates. Funding considerations reinforce this analysis. Unless there is a major change in government policy, any expansion of our undergraduate body will not entail enough extra funding even to maintain the current level of teaching quality. In contrast, an expansion of postgraduate numbers (both teaching and research) offers the prospect of enough extra revenue to actually raise the quality of both postgraduate and undergraduate provision.
American Scream
The Oxford Student
November 27, 2003
In his naive analysis of the future of global and American capitalism (American Scream,20 November 2003), Matthew-Eagleton draws a parallel between the alleged current imperial ambitions of the USA and those of British imperialism in the late nineteenth century: that imperialism is necessary in order to create new markets and prevent 'the inevitable crisis of capitalism'. Of course, by drawing the parallel between the present day and the late nineteenth century, he exposes the weak link in Marxian economic thought - that there is no such thing as an inevitable crisis. It didn't happen in the late nineteenth century and it isn't happening now. He's welcome to pop along to my macroeconomic principles lectures next term, if he's interested in learning a little economics!
A war that cannot be won
The Guardian
November 24, 2003
Jonathan Steele's article was a triumph of identification with the aggressor. If terrorism is part of human nature, as well it might be, then it will certainly never be eradicated, but that doesn't mean that the only possible counter-measures are political.
Clearly, criminality is also part of human nature, but alongside social policies to affect the supply of criminals we also have a criminal justice system that attempts to deter, punish, and rehabilitate offenders.
Surely, Steele wouldn't suggest abolishing the police, the courts, the prisons, and the probation service, just in case they make criminals resort to the desperate measures of frustrated people?
Outsourcing helps the poor
The New Statesman
November 10, 2003
Both Mariella Frostrup (Diary, 27 October) and Andrew Stephen (27 October) bemoan the ability of large firms to outsource production to the developing world. For Frostrup, the villain is HSBC; for Stephen, it is Wal-Mart. This is protectionist rhetoric. The low wages of workers in the developing world may give us moral qualms, but we must remember that their alternative employments are much worse. If we are serious about helping the world's poor, that means an increase in outsourcing, not just of agriculture and textiles, but of all sorts of other surprising things such as call-centres and computer programming. Who knows, perhaps the NS will one day be edited from Cambodia or Nepal!
Taxed to the hilt?
The Times
October 10, 2003
Sir, There are in fact a number of precise measures of the tax burden (Mr John Stiles's letter, October 8).
The Office of National Statistics annually produces estimates of the effects of taxes and benefits on household income. The most recent figures available state that direct and indirect taxes accounted for 35.3 per cent of all household gross incomes in 2001-02. The percentage will have risen a little since then due to the national insurance rise this year, but is still well below Mr Stiles's calculation of 55.83 per cent.
In fact, the most startling aspect of these data is that the tax burden is highest on low-income households; although they pay less direct tax proportionately, they pay much more indirect tax proportionately. So much so that households in the lowest fifth pay 42 per cent of their gross income in tax (from an average gross income of Pounds 8,980), while those in the top fifth pay 34 per cent (from their rather less modest annual gross income of Pounds 64,010).
Debt
The New Statesman
September 8, 2003
Ann Pettifor conjures up the image of the very rich being made immensely richer by lower coffee, copper and cocoa prices. Now I know how to recognise the rich - look for people in Starbucks drinking caffe mocha out of copper mugs.
"Diana's Uncrowning Glory" by Jason Hill
Salon Magazine
September 6, 2001
It was odd to see such a splendidly silly article about the British monarchy.
OK, it's true that the monarchy is a hereditary one, so that the monarch must necessarily descend from 'a bunch of dead Germans', but how exactly does this relate to the problems of modern ethnic Turks in Germany? It doesn't.
And as for the idea that the monarchy "ought to offend the moral sensibilities of all Americans," surely Americans should respect the right of another country to have a different system. After all, you guys decided you didn't want a king or queen back in the 18th century, but we didn't decide this, it seems.
Lastly, it may well be that Thomas Paine said, "The idea of hereditary legislators is as inconsistent as that of hereditary juries." But anyone who thinks that the British monarchy has any substantive role as hereditary legislators is entirely wrong. The monarch is not a legislator, does not sit in the Houses of Parliament and constitutionally just signs the bills that Parliament passes. Of course, if you want a sensible way of choosing a head of state (but not chief executive), perhaps it is best to keep it in the family. After all, a head of state chosen by heredity (or luck) is pretty independent of special interest groups or lobbyists, and owes his or her appointment to no major oil companies.