Here’s what Tax-news.com reported:

The poll of more than 300 entrepreneurs by business advisors Tenon also found that many more may follow in an attempt to escape the 50% rate of income tax, due to be introduced from next April on annual incomes above GBP150,000, with nearly half of the respondents (48%) still deciding what action to take. …Tenon points out that in the last month, high profile names such as the actor Sir Michael Caine and the artist Tracey Emin have threatened to change their tax residency to countries with more favorable tax rates. Popular locations for redomiciling include Monte Carlo, Guernsey, Liechtenstein, and the Cayman Islands. Andy Raynor, Chief Executive of Tenon Group, noted that entrepreneurs are showing their disapproval of the tax measures by “letting their feet do the talking.”

The mayor of London, meanwhile, is much less restrained regarding the foolishness of Gordon Brown’s class-warfare policy. Here’s what he has to say in the Daily Telegraph:

[T]he 50 [percent] tax rate that is beginning to drive these people away is a disaster for this country, and it is a double disaster that no one seems willing to talk about it. When Margaret Thatcher’s government cut the top rate of tax to 40 per cent in 1988, she was completing a series of reforms — beginning with the removal of exchange controls and followed by the Big Bang — that helped to establish London as the greatest financial centre on earth. Britain had been transformed from a sclerotic militant-ridden basket-case to a dynamic enterprise economy, and the capital became a global talent magnet. …So it is utterly tragic, at the end of the first decade of this century, that we are back in the hands of a government whose mindset seems frozen in the wastes of the 1970s.

By the way, I’m not picking on England. America is soon going to be making the same self-destructive mistake. Here’s my video on the broader subject of class-warfare tax policy.

Some hoped that the timid economic reforms announced by the “younger” Castro brother, when he assumed the official leadership of the geriatric regime, would constitute the opening salvos toward a more open and freer Cuba. However, a few of us spotted cracks in that fairy tale early on.

The recent beatings of Yoani Sánchez and other independent bloggers (described here by my colleague Ian Vásquez) are a clear reminder that, in Cuba, it’s business as usual under the Castro brothers’ rule.

The administration’s “more open than thou” rebuttal is a weak one. As I write in Chapter 9 of my new Cato book, Mad about Trade:

If an Olympics were held for the most open economy, the United States would be out of medal contention. According to the most recent annual Economic Freedom of the World Report, people living in 26 other countries enjoy greater “freedom to trade internationally” than do Americans. The report considers not only tariffs on imports but regulatory barriers, exchange rate and capital controls, and actual levels of trade. Bragging rights for the most open economies belong to, in descending order, Hong Kong, Singapore, the United Arab Emirates, Chile, the Netherlands, Ireland, Hungary, Switzerland, the Slovak Republic, and Estonia. The United States lies back in the pack, in 27th place among the 140 ranked nations.

Despite the claims of openness, our government imposes significant barriers against imported clothing, footwear, leather products, glassware, watches, clocks, table and kitchenware, costume jewelry, pens, mechanical pencils, musical instruments, cutlery, hand tools, ball and roller bearings, ceramic wall and floor tile, railway cars, processed fruits and vegetables, rice, cotton, sugar, milk, cheese, butter and canned tuna.

Since the book was printed, a new Economic Freedom of the World Report has been published. The United States has slipped to the 28th “most open market in the world.”

Just over a week ago, in an incident that was widely reported in the international press and that reveals the threat to the Cuban regime of the growing Cuban blogger movement, Sanchez was assaulted in Havana by plain-clothed government agents. Though she was forcefully beaten, she and her friends managed to fight back and get away. More than that, they took pictures of their assailants and of the incident for posting on the blog, prompting the government thugs to leave the scene. One photo of an agent features the caption “She is covering her face…Perhaps afraid of the future.” Another photo features Sanchez pursuing her assailants with the caption: “They have watched us for decades. Now we are watching them.” Very smart.

As it happens, last week we posted a beautifully written paper by Sanchez (in Spanish) on Cato’s Spanish-language web page, www.elcato.org. (The paper just won a prize in an essay contest in Mexico organized by TV Azteca at which my Cato colleague Juan Carlos Hidalgo was a judge.) Her essay, “Liberty as a Form of Payment,” describes the fraudulent deal that Castro promised when he came to power. In exchange for liberty, Cubans would be better off culturally, economically, and in other ways. Sanchez describes the reality of social control under communist Cuba in which the real exchanges occur as a consequence of the power relationship. Access to housing, jobs, new goods, and the possibility of minor improvements in life, all depend on a well documented support of the revolution through attendance of mass meetings and membership in the communist party, for example.

Or through personal relationships with those in power. Sanchez describes how young women long ago began prostituting themselves to high ministry or military officials in exchange for non-monetary goods or privileges. Such “courtesans of socialism” later turned to traditional prostitution with the arrival of currency convertibility in Cuba. Sanchez also optimistically describes the role that technology, especially the internet, is playing in creating spaces of liberty. In a country where people increasingly feel the regime’s days are numbered, such exercises of personal freedom can be powerful.

It is disheartening to see how easily a group of well-intentioned and well-fed activists can decide about new technologies at the expense of those who are starving.

Nestlé has been subject to intense criticism in recent years, primarily over its strategies to sell infant formula in developing countries, but I think Mr. Brabeck-Letmathe is spot-on here.

Penn & Teller made a similar, if  more forcefully put, point in the last few seconds of this excellent video (warning: language may be offensive to some).

Last month, the government submitted a draft act to Parliament that calls for amending the country’s constitution so that it would safeguard various elements of economic freedom. The amendments would put caps on public debt, spending and deficits; and ban any kind of price controls, state ownership of banks and financial institutions and restrictions on currency convertibility, and any kind of control over the movement of capital. New taxes or increases in tax rates would require approval through a national referendum.

With the possible partial exception of Hong Kong’s Basic Law, I’m not aware of any other constitution that explicitly enshrines economic freedom. I’m told by Georgian colleagues that prospects for passage of the law looks good, with the constitution being amended as early as next month.

First, a few words about the author — a Marxist philosopher from Slovenia. Generally ignored or ridiculed in Slovenia, Zizek is considered (by some) to be the new messiah of leftist thought in the West. Why did the NYT chose to celebrate the 20th anniversary of the collapse of communism with Zizek’s call for “socialism with a human face,” rather than an op-ed by someone like Vladimir Bukovsky, a former Soviet political prisoner tormented for years by the communists, is anyone’s guess.

But, it is the substance of Zizek’s article that is so misleading. The article makes absolutely no mention of the economic progress made in Central and Eastern Europe. Yet, as the World Bank and even the United Nations tell us, incomes in the region have substantially increased and so has school enrollment. People live longer and healthier lives; environmental quality has much improved.

Zizek mentions communist oppression, but nowhere does he mention that 100 million people have died in the pursuit of communist utopia. Contemporary Marxists either ignore the astonishingly high number of victims of communism or try to minimize it. That is understandable. No matter what the (real or imagined) problems with capitalism are today, no sane person would be willing to embrace an alternative to capitalism that has a habit of resulting in a mountain of corpses.

The second — and equally risible tactic of contemporary communists (as Paul Hollander mentions in his just released Cato study) — is to try to draw a moral equivalence between socialism and market democracy. Zizek attempts to do exactly that by telling a story of a Soviet defector who became an outspoken critic of McCarthyism in the United States. The idea that there is any but the most superficial similarity between Soviet totalitarianism and the United States in the 1950s is preposterous — unless, of course, you are a modern-day leftist trying to salvage whatever remains of your philosophy from the dustbin of history.

Zizek is right to point out that there is growing disenchantment with capitalism and democracy. But, the recently released Pew and BBC polls have surely been influenced by the current (and likely temporary) economic environment, which, we are told, is the worst since the Great Depression. There are other psychological factors at work. Current problems feature more prominently in the minds of today’s Central and Eastern Europeans than shortages of 20 years ago and the old tend to remember their youth fondly — no matter what the actual political and economic circumstances.

Last, but not least, young people in the region know very little about communism. Learning about communism is by-and-large superficial, because the level of collaboration with communist regimes was very high among the general public. A thorough investigation of communist crimes would open too many wounds, it is claimed. Unfortunately, this collective amnesia means that instead of appreciating the great advances that their societies have made over the past 20 years, young people focus on their societies’ shortcomings vis-à-vis the contemporary West.

I have lived under communism. Although I have never personally experienced its true horrors, I had family members who did. The NYT’s choice of a lead op-ed on the day of an almost miraculous deliverance of hundreds of millions of people from communist slavery is shameful and sickening.

At a seminar in Wroclaw, Poland hosted by the Polish Adam Smith Center last month, I was reminded that the Poles correctly view their country as playing a central role in the 20th century drama of totalitarian aggression and eventual liberation. As the title of a book I was given suggests—It All Began In Poland—the country’s invasion by Nazi Germany, which sparked World War II, and the invasion and partial occupation by the Soviet Union almost immediately thereafter signaled what was in store for much of Europe. Similarly, the peaceful revolution of freedom that culminated in the collapse of communism was symbolized and pushed forward early on by Poland’s heroic Solidarity movement.

People from all parts of the former Soviet empire deserve recognition and admiration for their efforts and sacrifices in promoting freedom. As we reflect on this momentous day, let’s remember the special role the Poles played in making the world a better place.

Is it a “tragedy” (Newt Gingrich) that Obama did not go to Berlin to commemorate the fall of the wall?

My response:

There are many ways to characterize President Obama’s failure to appear personally today, on behalf of the American people, to commemorate the fall of the Berlin Wall.  None does him credit.  Yet to criticize his decision is to invite the derision of his apologists, as we are seeing already here at Politico Arena.  It is as if the Cold War never ended.  And at a fundamental level, it hasn’t.

The Berlin Wall fell for many reasons, ranging from the internal contradictions of communism to the moral clarity and courage of communism’s opponents.  Above all, however, the Cold War marked a fundamental clash of ideas.  And nothing symbolized that clash more starkly than the Berlin Wall.  It was erected not to keep West Germans out of the “workers paradise” but to keep East Germans trapped behind the wall, many of whom were mercilessly shot as they tried to flee their brutal captors.  What greater symbol could there be of the difference between freedom and oppression.

Yet for all that time there were apologists and temporizers in the West.  “Detente,” “moral equivalence,” “convergence” — “we are now free of that inordinate fear of communism,” President Carter said in 1977, even as Aleksandr Solzhenitsyn, Vladimir Bukovsky, Natan Sharansky, and others were documenting the horrors of communism.  And only two years before the wall fell, as the Wall Street Journal notes editorially this morning, we heard CBS’s Dan Rather say, “Despite what many Americans think, most Soviets do not yearn for capitalism or Western-style democracy.”

Which brings us to President Obama.  What does he think?  Where does he stand on this fundamental clash of ideas?  What meaning is to be drawn from his decision to forgo the commemoration in Berlin today?  One can only speculate from what he has said and done, but the record does not inspire.  To be sure, several of his speeches suggest that he is a man of freedom — but his actions contradict those words.  Where has he been on the great human rights issues of our day?  When reformers were being brutalized in Iran, both over the summer and last week, he was slow, at best, to find a voice.  When the Dalai Lama visited last month, Obama declined to see him — the first time, in 10 visits since 1991, that a U.S. president has done so.  He’s had us join the U.N. Human Rights Council, the main mission of which seems to be to criticize the U.S. and Israel while lending credibility to its own oppressive members.  There’s more, but on balance it’s a sorry record.  He’s no Ronald Reagan.

It’s on the domestic front, however, that questions loom especially large.  His every move is that of a government man.  True to his roots as a “community organizer,” he sees government as the solution to our problems.  On autos, he has converted a bailout into ownership, fired the head of GM, and told the auto companies what kinds of cars to build, despite what the market might say.  He has appointed a “pay czar” — among many other “czars,” not to go unnoticed on this day — and empowered him to set executive pay scales.  He is promoting a union organizing scheme that effectively eliminates the secret ballot, environmental policies that fall most heavily on the poor, and tax and spend policies that penalize ambition and thrift while indebting us for generations to come.  And his health care policy will in time make us all dependent on government. Those policies, like so much else on his agenda, will restrict rather than expand our choices.  If enacted, we will all be less free.

It is the siren song of government “beneficence” that Obama seems most to hear, oblivious to the lessons of the 20th century.  The tragedy would be that we ourselves forgot that the fundamental clash of ideas will always be with us, even when the Berlin Wall is a distant memory.

• After 20 years, Paul Hollander looks back at why the Berlin Wall fell.

• Nazism and Communism: Why you rarely hear about the atrocities of Soviet communism.

• Imposing “paradise” at gunpoint.

• Flashback to 1990: Why the Soviets fell.

• Fear and Loathing in the Soviet Union: Cato president Ed Crane discusses his trip to the other side of the Iron Curtain in 1982.

• Podcast: Why Russia must confront the criminal nature of its communist past.

The only thing I don’t like about this video is that I fear people may no longer want to watch the ones I narrate.

As President Obama proclaimed when introducing his American Graduation Initiative, which is now part of the ironically titled Student Aid and Fiscal Responsibility Act:

By 2020, this nation will once again have the highest proportion of college graduates in the world….Already we’ve increased Pell grants by $500. We’ve created a $2,500 tax credit for four years of college tuition. We’ve simplified student aid applications….A new GI Bill of Rights…is beginning to help soldiers coming home from Iraq and Afghanistan to begin a new life — in a new economy.  And the recovery plan has helped close state budget shortfalls…at the same time making historic investments in school libraries and classrooms and facilities all across America.  So we’ve already taken some steps that are building the foundation for a 21st century education system…one that will allow us to compete with China and India and everybody else all around the world. 

Now, while a college education could furnish important learning that helps drive innovation and economic development, it could also be as worthless as conferring a bachelor’s degree on a dog. What’s important is that people actually learn things of value, not simply that they get degrees. But a funny thing happened in China…

Yesterday, news broke that China’s top education official has been sacked. Reports the New York Times:

Facing rising criticism over the quality of schools and a crush of jobless college graduates, China’s legislature announced Monday that it had removed the minister of education after six years on the job and replaced him with a deputy.

China has been cranking out college graduates at a breakneak pace, but the quality of the education has become highly suspect and, perhaps more importantly, there haven’t been nearly enough jobs to employ all the newly credentialed. In other words, simply producing more graduates — no matter how much it has frightened some people in America – has largely been a waste.

The obvious lesson from this should be that it’s foolish to simply make massively expanding the ranks of degree holders a national goal. But that doesn’t compute for many U.S. politicians, despite abundant evidence that we don’t need heaps more graduates anymore than China does. It’s getting elected that matters most to politicians, and as long as voters keep believing that government is opening the door to the middle class simply by pushing more and more people to college, politicians will keep wasting taxpayer dollars on unnecessary degrees.

So let’s hope that both voters and politicians will learn China’s clear college lesson: Fixating on degrees is not very smart. Failing that, let’s hope that we at least don’t have any rioting… 

You’re a billionaire but you don’t want anyone, least of all the taxman, to know. What do you do? Head for a palm-fringed island paradise or a snow-covered Alpine micro-state? Wrong. The world’s most opaque jurisdictions – the ones that will best shield you and your cash from the light – are mostly in the heart of the most sophisticated and powerful global financial centres. London, Luxembourg and Zurich are in the top five most secretive jurisdictions, according the first comprehensive index of financial transparency ever compiled. Yet top of the pile, beating the British Virgin Islands, Belize or Liechtenstein as the best place to hide wealth, is Delaware. One of the smallest states in the US, it offers the best protection for anyone who does not want to disclose their identity as a beneficial owner of a company. That is one very good reason why the East Coast state hosts 50% of the US’s quoted firms and 650,000 companies – almost equivalent to one company per Delaware resident. …Delaware – the political power-base of the US vice-president, Joe Biden – offers high levels of banking secrecy and does not make details of trusts, company accounts and beneficial ownership a matter of public record. Delaware also allows companies to re-domicile within its borders with minimal disclosure, and allows the existence of privacy-enhancing “protected cell” or “segregated portfolio” companies, among many other stratagems useful for protecting the identity of those who do business there.

Nowhere in the 1,058-word story is the impact on consumers ever mentioned. But it is American consumers who pay the biggest price when the dollars we earn buy less on global markets. We are paying more for oil, which not coincidentally has zoomed toward $80 as the dollar flounders. A weaker dollar means higher prices than we would pay otherwise for a range of goods, from imported shoes and clothing to food, that loom large in the budgets of American families struggling to make ends meet in this difficult economy.

Ignoring consumer interests is widespread in reporting about trade. It reflects the strong bias of elected officials to see trade issues strictly through the lens of producers and never consumers. After all, it is producers who form trade groups and hire lobbyists to promote their exports or protect themselves from imports. Nobody in Washington represents the diffused, disorganized but much more numerous 100 million American households.

The dollar’s value should be set by markets, and I have no reason to believe the dollar is over- or undervalued. But pardon me if I dissent from the consensus that a falling dollar is unambiguously good news.

Indeed, according to the press, a £250,000 ($413,000) shower with air conditioning and radio surround sound that was “built to the exact specifications of the French President Nicolas Sarkozy” was paid for by the EU taxpayer during the French Presidency of the European Union in July 2008.

 It was “disposed of soon afterwards, unused, together with most of the equipment bought for the £16million ($26 million) conference.” The press also reported “other expenses included £1million ($1.65 million) spent on the opening dinner alone – more than £23,000 ($38,000) for each of the 43 heads of state.”

Despite having received upwards of $800 billion in revenues during Chávez’s ten years in power, the government is doing a dismal job of carrying out its proper functions—such as controlling crime or corruption—and public administration in other areas is deteriorating. Chávez recently announced regular cuts in electricity and water provision. (These issues will be discussed in an upcoming Cato forum on Venezuela on November 10.)

As domestic conditions deteriorate, Chávez is apparently feeling more empowered, or at least feels the need to continue his relentless accumulation of power. Today, El Universal, a Venezuelan daily, reports that Chávez has announced that he can expropriate private enterprises at will because he was given that power by the people. Why worry about the rule of law when you have the ability to interpret the will of the people? Chávez’s comments reported today should dispel any doubts that he considers himself a savior to his country:

Every day I’m more of a revolutionary, every day I’m more socialist… I’m going to take Venezuela toward socialism, with the people and the workers…The revolution is not negotiable, socialism is not negotiable, because every day I’m more convinced that socialism is the kingdom of God on earth. That is what Christ came to announce.

I have an understandable soft spot for the latest posting, on my new Cato book titled Mad about Trade: Why Main Street America Should Embrace Globalization.

(H/T: Josh Blackman.)

Update: It looks like J. Crew got some heat for the reference to Che Guevara, and renamed the jacket. However, my colleague Chris Moody found a screen shot of the page when it still mentioned the name of the bloody Latin American revolutionary.

Klaus, who has been at the pinnacle of Czech politics for the last 20 years (as minister of finance, prime minister, speaker of the house and now as president), has an unmatched understanding of the Czech people. Clearly, once again, he was able to discern the public mood better than others. That includes his successor as the leader of the center-right Civic Democratic Party (ODS), Mirek Topolanek, who once opposed the Lisbon Treaty but now supports it. It seems that the ODS is in a state of revolt against him and may unseat him at the ODS Party Congress in November.

Klaus will be much encouraged by the above poll. As a consequence, it is less likely that he will give way under pressure and sign the Lisbon Treaty anytime soon. If he can hold out until the likely British referendum on the Lisbon Treaty midway through 2010, he will likely be remembered as the man who put an end to the most ambitious attempt to create a centralized European super-state in modern history.

According to him, the failure of Russia to acknowledge the criminal nature of its communist past—as was rightfully done in the case of Nazism after its demise—in large part explains the return of authoritarianism in Russia. There don’t seem to be any celebrations of the fall of communism planned in Russia, and the West is currently consumed with major issues including how to deal with Iran, the global financial crisis, etc. But valiant efforts to remind the world of the horrors of communism include the compelling new documentary, The Soviet Story, which features Bukovsky and new evidence of Soviet complicity with the Nazis. Join us for a screening of the movie at the Cato Institute on November 2.

Based on the above contention, the Kyoto Protocol imposes no direct costs on developing countries and holds out the prospect of large amounts of transfer payments from industrialized to developing countries via the Clean Development Mechanism or an Adaptation Fund. Not surprisingly, virtually every developing country has ratified the Protocol and is adamant that these features be retained in any son-of-Kyoto.

For their part, UN and other multilateral agencies favor this approach because lacking any taxing authority or other ready mechanism for raising revenues, they see revenues in helping manage, facilitate or distribute the enormous amounts of money that, in theory, should be available from ICs to fund mitigation and adaptation in the DCs.

Continue reading here.

However, the Senator reports a legal analysis at the State Department prepared by its top lawyer that apparently has informed Washington’s policy but that has not been made public nor even released to DeMint despite his repeated requests. In the interest of democracy and transparency, the State Department should immediately release its legal report. Maybe then we (which includes much of the hemisphere) will be less mystified about what is driving Washington policy toward Honduras. Or at least we’ll have a better insight on the administration’s understanding of democracy.

Lynne Kiesling of Knowledge Problem is pleased:

Both Ostrom’s work on governance institutions and common-pool resources and Williamson’s work on governance institutions and the transactional boundary of the firm contribute meaningfully to our understanding of how individuals coordinate their plans and actions in decentralized, complex systems.

Arnold Kling stresses the implications of their work for issues of decentralized knowledge and centralized power.

The official description of Ostrom’s work by the Swedish Bank identifies some implications for regulation:

The main lesson is that common property is often managed on the basis of rules and procedures that have evolved over long periods of time. As a result they are more adequate and subtle than outsiders — both politicians and social scientists — have tended to realize. Beyond showing that self-governance can be feasible and successful, Ostrom also elucidates the key features of successful governance. One instance is that active participation of users in creating and enforcing rules appears to be essential. Rules that are imposed from the outside or unilaterally dictated by powerful insiders have less legitimacy and are more likely to be violated. Likewise, monitoring and enforcement work better when conducted by insiders than by outsiders. These principles are in stark contrast to the common view that monitoring and sanctioning are the responsibility of the state and should be conducted by public employees.

Paul Dragos Aligica and Peter Boettke of George Mason University showed excellent prescience in publishing a book this summer on the work of Ostrom, her husband Vincent, and their colleagues at Indiana University, Challenging Institutional Analysis and Development: The Bloomington School.