Thanks for all that talk of cake and jelly. I’m starving now! I’ll try to distract myself by answering some of your questions.

“the question of national taxation is actually a destroyer of wealth is dependent on a number of variable factors. It can’t be taken in isolation…”

Actually, it can. By using a large enough data set one can control for individual variables and see how each one affects wealth. This is what Smith has done using WINMOD, his econometric model. It is of course true that other things affect wealth creation too (which is why Sweden is not a basket case) but it is equally true that lower (but not extraordinarily low) taxation would encourage wealth creation.

As for “the efficiency of state spending…”, he also finds that efficiency drives are illusory. The only way to increase efficiency is to reduce expenditure first, forcing politicians and bureaucrats to economise. Trying to find the economies to achieve saving doesn’t work.

“it is a more complex sum to calculate than you suggest”

I’m not sure suggested any sum, let alone a simple one. Econometric models are massive. Smith, btw, would not dispute your statement that taxation “can also protect wealth and the means of wealth creation.” His findings are that growth is maximised at a tax-take of c.20%, while welfare is maximised at a tax-take of c.35%.

So his findings provide no solace to the arch-libertarians!

“On welfare, charitable giving and philanthropy I remain unconvinced that there aren’t accurate economic calculations being taken into consideration from the perspective of individuals concerned…”

Such cynicism in one so young! (Or not. I’ve no idea how old you are!!)

However there’s a lot of clarification needed in the detailed calculations.

*extended metaphor alert*
I fully accept that a larger cake is desirable because each slice can support more candles, but I also know a good party needs jelly and ice-cream and balloons and lots of rum.

My point refers to the problem that the question of national taxation is actually a destroyer of wealth is dependent on a number of variable factors. It can’t be taken in isolation from predictions about the global economy, particularly where trade is a large factor, nor the efficiency of state spending and the effectiveness of state regulation.

So, while I certainly agree that taxation does have wealth destroying properties, I accept it can also protect wealth and the means of wealth creation (for example good health in a nation is essential to provide an ample labour pool).

Therefore it is a more complex sum to calculate than you suggest. On the other hand each nation is an active agent in the global economy so the compound effect of accurate calculations at the time may have had even greater positive consequences!

But fun as it is to reminisce over might have beens and the cumulative failings of successive Labour and Conservative governments and the compatible leadership ideologies of each period (post-war under Atlee, Churchill and Macmillan; Wilson, Heath and Callaghan; Thatcher, Blair and Brown) we need to be more insistent on pointing out the specific weaknesses in their calculations which distort the conclusion.

So on welfare, charitable giving and philanthropy I remain unconvinced that there aren’t accurate economic calculations being taken into consideration from the perspective of individuals concerned (eg tax write-offs are a massive stimulus to philanthropy).

I’m not sure I understand the question “have you got any evidence to show the relative contributions made by voluntary supporters of the welfare state?” My point was that those who support a re-distributive system are either kind – in which case they would give voluntarily if it were not for coercive taxation – or they are selfish (i.e. making “an economic calculation made from a personal perspective”). As, evidently, not everybody can benefit from a redistributive system, some must either support it through kindness that would be replicated in the absence of coercion or they are victims of force. The fact that charity does exist suggests that there are plenty for whom kindness is the motive so I think that suggests that the “deserving poor” would not be left to rot.

Having said that, there is empirical evidence that suggests that countries with lower tax rates (e.g. in North America) are more philanthropic than those with higher tax rates (e.g. in Europe). I can’t be bothered to hunt out chapter-and-verse but I think this is widely acknowledged.

The wealth destroying effects of taxation are well documented too. My favourite study (because it was so interesting and readable) is by David B. Smith, who estimates that had the UK Government continued to tax at 1960s levels (taking 30% of national income instead of 40%, which is hardly anarcho-capitalism!), UK GDP would now be nearly twice current levels. As Smith notes, “Total public expenditure would then be higher, albeit as a lower proportion of a much bigger national output.” What government and populous would not prefer to spend 30% of £2.5tr on public services rather than 45% of £1.2tr?

This is a separate (though not unrelated) argument, of course. My point was that higher incomes combined with a greater proportion taken home would make us spectacularly rich and so foster greater philanthropy, a relationship for which evidence does exist.

“I think civil liberties are an issue where….”

I think this is right, though I also think it makes a certain sense. Debate naturally tends to polarise because we push for (our perspective of) perfection in theory even if we accept compromise in practice.

I think the solution it to create structures that address the threats but do not invade legitimate privacy. For example (an unusual real-Tom example!) I support the use of mobile CCTV to monitor known fly-tipping hot-spots, but do not generally support permanent, blanket CCTV coverage. I want an effective police force bound by the rule of law: I don’t want them crippled; neither do I want them beating up protesters.

Seasteading? It’s a fantasy that harks back to (dare I say it?) Matthew’s wild frontier. We have to accept the parcelled-into-states world in which we live (for now) and try to make them better places to live.

Anyway, nobody has yet built a platform that can host millions of people, complete with sustainable economy and a decent nightlife. As Matthew might put it, my freedom to party would be limited!

(Perhaps I do him a disservice. I have no reason to believe he would use “party” as a verb!)

My suspicion is that support or opposition of welfare is largely an economic calculation made from a personal perspective and is something therefore that should be left to democratic decision-making.

If you want to convince a majority that the opportunity loss is not more than compensated by gains made by reduced risk it’d help to show some figures for exactly how much wealth is destroyed under what conditions.

Which returns to the general theme of being able to find an adequate balance between positive and negative liberty.

I think civil liberties are an issue where totalitarian polemic balances libertarian polemic – for example we accept some cctv where there is a specific need; we accept the police even if we fear a police state because crime is an equal threat.

So while I think we may be going too far in the totalitarian direction under Labour it doesn’t mean I want to be a seasteader.

You question how a free society would protect those who genuinely can’t find work. I would suggest that those who were capable would find work: systemic mass unemployment is a feature of the welfare state; there was only seasonal unemployment during the C19th.

As for those who were not capable, I believe that there would be sufficient support for them from friends, family, communities and charity. The fact that many people support tax-funded welfare suggests that they would support voluntarily-funded welfare as well (unless you believe that such people only support funding welfare out of other people’s contributions. What is more, there would be more resources to go around because the wealth-destroying effects of the Welfare State would be eliminated.

Markets have proved themselves remarkably effective in the field of education: the extent to which children were moved out of factories and into schools in the C19th before legislation pushed the process proves that they can work. You might also want to consider the growth of private educational provision in the Third World, where people have abandoned underfunded state schools and set up on their own.

As for Global Warming, I think it is rather premature to say that markets have failed. They’ve not been given a try. Never has an issue be socialised so quickly! In fact, markets might provide much better solutions because they do not require government foreknowledge and they factor in the possibility that adaption, rather than prevention, may be the better response.

I’m not sure what you mean by “What about inheritance?”.

BTW: Irrespective of all of the above, I still don’t think that some notion of a Social Contract justifies the use of draconian infringement of civil liberties. Which, we all keep forgetting, is where this discussion began.

That’s because markets don’t deal with imaginary neuroses, however popular.

the full economic impact is not going to be felt for many many years

Armageddon is always just a little way in the future isn’t it? Close enough to terrify, but far enough away to be as yet undetectable.

at which point and changes will be too late to have an effect and the suffering caused may be huge.

May be. Yes, nothing like certainty is there?

Too sit back now under the premise that, once the economic impact is felt, truly free markets will best determine who suffers and who doesn’t seems callus to say the least.

Just as well we didn’t start remedial action against the Ice Age predicted in the 70s isn’t it? I remember that as a kid, it was quite the rage. I remember drawing plans for giant glacier-melting electric pylons (I was under 10, it’s allowed). Sensible people grow out of such things.

Mind you, the big scare then was Nuclear War, and remembering that, I’ve long been convinced that people who believe in global warming don’t actually believe in global warming. What do I mean? Well, when I was a teenager I remember having long, earnest conversations with my fellows about the coming holocaust, and 10 megaton airbursts and fallout shelters and so on. But none of us were, in truth, in the least scared; we found the prospect rather exciting, all the mutants and so on. In our hearts, we knew the whole thing was imaginary. And I think eco-doomists are the same. They believe that they believe, but they don’t really believe, not in their hearts. It’s just an exciting idea to them, or an intellectual exercise. Fat Al’s purchasing of beachfront property has become a cliche, but is indicative; the most hysterical of the mongers are living their lives precisely as if the thing they predict will not happen- they make long term financial investments and zap around the world in jumbo jets, and it’s because they are just like a bunch of excitable teenagers who find the whole idea terribly exciting.

We didn’t live as if the world were about to end, and neither do the Warmists. Some of their followers do; some of them are genuinely terrified of the future, but the majority are strangely emotionally detached from it.

Anyway, it’s not going to happen, so it doesn’t count as a market failure.

What about inheritance?

Who would care about inheritance if the world were going to end?

Markets have proven themselves in capable of dealing with crisis such as global warming, the full economic impact is not going to be felt for many many years at which point and changes will be too late to have an effect and the suffering caused may be huge. Too sit back now under the premise that, once the economic impact is felt, truly free markets will best determine who suffers and who doesn’t seems callus to say the least.

What about inheritance?

Joe

I specifically denied that a ‘planning government’ is always better, but the whole point of a government is to take the current situation and institute a plan *of improvement* which it hopes will maintain it support to see it through to the next election.

Look at the stats game for example. There are lies, damn lies and politicians who use stats. Would you rather there were no statistics to be manipulated, even if that meant we would then be unable to disinter how the political manipulation was transpiring and make accurate judgements thereupon?

If so your definition of ‘neutral’ would appear to boil down to pot luck – which on standard probability will of course sometimes be better than the arse-end of a government regime (such as now), but doesn’t ever provide any means of controlling your own destiny.

The answer isn’t to abolish the role of government, but to change the policy of the government of the day. And if they won’t change it then we must change them.

Right need sources for this one. Evidence please.

You’re calling a government that plans an ‘accurate and honest’ one, but the opposite of a neutral government is a planning government, one that takes sides.

Where’s yoru evidence that a planning government is *always* better than a neutral government, even if the planning government is picking sides and winners based on political considerations rather than economic considerations (if you can actually make a distinction?)