Britain may have given the world freedom as we understand it (see The Liberty of Ancients Compared with that of Moderns by Benjamin Constant), but you would not know it from the last prime ministerial debate that took place last Thursday. The candidates (Conservative David Cameron, Labour’s Gordon Brown and Liberal Democrat Nick Clegg) used the word “freedom” only 2 times. They said the word “free” 5 times, but all in the context of the supposedly “free” goodies, which they promised to lavish on the electorate. Words “responsible” and “responsibility” fared somewhat better (4 times). But the winning words were “fair” and “fairness” that were mentioned 22 times — almost always in connection with taxing the rich. Here is a typical example:

Brown: “But I come back to the central question about fairness that has been raised by our questioner. How can David [Cameron] possibly justify an inheritance tax cut for millionaires at a time when he wants to cut Child Tax Credits? Let’s be honest. The inheritance tax threshold for couples is £650,000, if your house is worth less than that you pay no inheritance tax. What David [Cameron] is doing is giving 3,000 people, the richest people in the country, he’s going to give them £200,000 each a year. That is simply unfair.”

It was Gordon Brown, the current Prime Minister, who increased the top rate of income tax to 50%. Neither Clegg nor the supposedly business-friendly Cameron have proposed to cut that rate. Indeed, “fairness” in British politics seems to amount to little more than taxing the most productive members of society “until the pipes squeak.” Those words were uttered by Denis Healy who was the Chancellor of the Exchequer in the 1970s. It was under his leadership that the UK ran out of money and had to borrow billions from the IMF. It turns out that when you tax the rich too much, they will work less or leave for a more hospitable jurisdiction. Margaret Thatcher and Ronald Reagan understood it. Messrs Cameron, Clegg and Brown do not.



Forget Freedom. The UK Poll Is All About ‘Fairness’ is a post from Cato @ Liberty - Cato Institute Blog

“Michael Foot, a bookish intellectual and anti-nuclear campaigner who led Britain’s Labour Party to a disastrous defeat in 1983, died [March 3],” reported the Associated Press. He was 96.

Foot personified the socialist tendency in the Labour Party, which Tony Blair successfully erased when he won power at the head of a business-friendly, interventionist “New Labour.” Yet Foot remained a respected, even revered, figure.

“Michael Foot was a giant of the Labour movement, a man of passion, principle and outstanding commitment to the many causes he fought for,” Blair said Wednesday. Prime Minister Gordon Brown, Blair’s partner in creating “New Labour,” praised Foot as a “genuine British radical” and a “man of deep principle and passionate idealism.”

Michael Foot may have been the most serious intellectual ever to head a major Western political party. He wrote biographies of Labour politicians Aneurin Bevan and Harold Wilson, and of H.G. Wells, and a 1988 book on Lord Byron, “The Politics of Paradise,” and he edited the “Thomas Paine Reader” in 1987. So when you asked Michael Foot what socialism was, you could expect a deeply informed answer. And that’s what the Washington Post got in 1982, when they asked the Labour Party leader for an example of socialism in practice that could “serve as a model of the Britain you envision.” Foot replied,

The best example that I’ve seen of democratic socialism operating in this country was during the second world war.  Then we ran Britain highly efficiently, got everybody a job. . . . The conscription of labor was only a very small element of it.  It was a democratic society with a common aim.

Wow. Michael Foot, the great socialist intellectual, a giant of the Labour movement, a man of deep principle and passionate idealism, thought that the best example ever seen of “democratic socialism” was a society organized for total war.

And he wasn’t the only one. The American socialist Michael Harrington wrote, “World War I showed that, despite the claims of free-enterprise ideologues, government could organize the economy effectively.” He hailed World War II as having “justified a truly massive mobilization of otherwise wasted human and material resources” and complained that the War Production Board was “a success the United States was determined to forget as quickly as possible.” He went on, “During World War II, there was probably more of an increase in social justice than at any [other] time in American history. Wage and price controls were used to try to cut the differentials between the social classes. . . . There was also a powerful moral incentive to spur workers on: patriotism.”

Collectivists such as Foot and Harrington don’t relish the killing involved in war, but they love war’s domestic effects: centralization and the growth of government power. They know, as did the libertarian writer Randolph Bourne, that “war is the health of the state”—hence the endless search for a moral equivalent of war.

As Don Lavoie demonstrated in his book National Economic Planning: What Is Left?, modern concepts of economic planning—including “industrial policy” and other euphemisms—stem from the experiences of Germany, Great Britain, and the United States in planning their economies during World War I. The power of the central governments grew dramatically during that war and during World War II, and collectivists have pined for the glory days of the War Industries Board and the War Production Board ever since.

Walter Lippmann was an early critic of the collectivists’ fascination with war planning. He wrote, “A close analysis of its theory and direct observation of its practice will disclose that all collectivism. . . is military in method, in purpose, in spirit, and can be nothing else.” Lippman went on to explain why war—or a moral equivalent—is so congenial to collectivism:

Under the system of centralized control without constitutional checks and balances, the war spirit identifies dissent with treason, the pursuit of private happiness with slackerism and sabotage, and, on the other side, obedience with discipline, conformity with patriotism. Thus at one stroke war extinguishes the difficulties of planning, cutting out from under the individual any moral ground as well as any lawful ground on which he might resist the execution of the official plan.

National service, national industrial policy, national energy policy—all have the same essence, collectivism, and the same model, war. War is sometimes, regrettably, necessary. But why would anyone want its moral equivalent?

RIP Michael Foot, a Socialist Who Understood What Socialism Was is a post from Cato @ Liberty - Cato Institute Blog

A further chapter in Britain’s economic suicide comes from Tax Notes International today (subscription only):

In a move apparently aimed at lowering their tax bills, major U.K. sports bookmakers William Hill and Ladbrokes plan to relocate their sports betting operations to Gibraltar, according to media reports.

The move by William Hill was announced on August 4 and was subsequently followed by Ladbrokes’ announcement on August 6. The moves are projected to cost the U.K. Treasury millions of pounds in tax revenue, according to an August 6 report on www.guardian.co.uk.

The departure of these sports betting firms, particularly if other sports bookmakers follow, could put the U.K.’s entire online gambling market (the largest legal betting market in the world) beyond the reach of either the Gambling Commission or the Treasury, according to media reports.

Ladbrokes CEO Christopher Bell cited “intense competitive pressure” as the main spur pushing his company offshore. “Our award winning sportsbook Ladbrokes.com is the biggest in the U.K. market but faces aggressive competition from offshore operators who hold a very significant cost advantage by operating from low tax jurisdictions. Operating from the U.K. has become unsustainable and we will relocate by the year end,” he was quoted as saying in an August 6 statement on the Ladbrokes Web site.”

The 15 percent tax on online gambling (the industry had lobbied for a 2 percent or 3 percent tax), one of Gordon Brown’s last acts as chancellor of the Exchequer, has been generally seen as an embarrassment for London, which had sought to position the U.K. regulatory approach as world leading. Instead of applying for licenses with the Gambling Commission as the laws’ drafters had hoped, members of the online gambling industry have boycotted the U.K. and headed offshore.

“The U.K. has effectively turned its back on the industry. It will now be almost impossible for a U.K.-based operator to compete with offshore business,” John Coates, chair of the Remote Gambling Association, said in a March 2007 statement. Sports betting became the last gambling subindustry to remain onshore.

Currently, the total tax faced by U.K.-based sports bookmakers includes the 15 percent profits tax, a 15 percent VAT, corporate tax, and a special 10 percent tax for horse racing betting profits. Tax rates in offshore locations such as Gibraltar, Malta, or the Isle of Man are only about 1 percent to 2 percent, according to the statement on the Ladbrokes Web site, and there is no special horse racing profits tax.”

Britain’s Brown Bounces Betting Businesses is a post from Cato @ Liberty - Cato Institute Blog

A Bloomberg story on one cause of the ongoing British economic disaster under Prime Minister Gordon Brown:

Andrew Wesbecher moved to London from New York in 2006 to sell software to banks and hedge funds. This month he joined the exodus of American expatriates fleeing high taxes and the city’s shrinking financial industry . . . Americans are heading home as Britain plans a 50 percent tax rate for those who earn more than 150,000 pounds ($248,000) a year and employers cut benefits for workers living abroad, reducing the allure of London. That comes a year after the U.K. said foreigners who have lived in the country for more than seven years must pay 30,000 pounds annually or give up the special status that shields overseas income from British taxes.

Since the 1980s, London has boomed as an international city open to the world’s entrepreneurs and their wealth, and perhaps home to more billionaires than any other city. The British economy as a whole has done quite well, pulled ahead by London and driven by a new free-market spirit in the wake of Margaret Thatcher’s privatization, deregulation, and tax cuts. Thatcher rightly argued that her cuts to income tax rates “provided a huge boost to incentives, particularly for those talented, internationally mobile people so essential to economic success.”  High tax rates at the top end were a “symbol of socialism” that she wanted to scrap.

Brown is killing the free-market goose that laid the golden eggs of Britain’s success. I really don’t understand the vision of such politicians — don’t they know what they are doing? I want people to be successful. I want entrepreneurs to create wealth. I love growing, vibrant cities.  Why do some people want to destroy all that?

British Economic Suicide is a post from Cato @ Liberty - Cato Institute Blog

Here’s how YouTube describes the following clip:

Daniel Hannan, Conservative MEP for South East England, gives a speech during Gordon Brown’s visit to the European Parliament on 24th March, 2009.  Read Daniel’s blog at www.hannan.co.uk.

Can I import him?

Can I Vote for This Guy? is a post from Cato @ Liberty - Cato Institute Blog