Why taxes are good for you #6: The best thing for an Enterprise Economy

As we approach the end of this series, we could not resist two more arguments which have always irritated the “taxes are evil” lobby. If only because we haven’t met one of them who has come up with a convincing counter argument. And the first should be beloved of all: taxes are a superb way to control inflation. As Britain and the US began to gear up for the Second World War the sheer enormity of the spending needed ran the risk of runaway inflation. It was Keynes in How to Pay for the War who saw the answer. Taxes, he argued would not provide the money; they would suck excess cash from everyones’ wallets , thereby keeping prices on a relatively stable trajectory. The US applied a similar philosophy in its own way [1] The economy grew at unprecedented rate, bringing prosperity to all. And there was a an even more significant side effect, which led to prosperity lasting for decades thereafter.

Because in both Britain and the US, vast defence spending contracts generated an equally vast ecology of institutions, government departments, University research labs and the rest. All beavering away at new discoveries, new ideas and shiny technologies. No wonder the years 1945 -1970 are remembered so fondly as times of progress and prosperity . Names like Rolls Royce, Boeing and McDonnell Douglas are just the tiniest iceberg tips. If you want to know more, trying kicking off from the site of the US’ famous famous DARPA[2] a seed bed for an almost fractal cornucopia of new ideas. Even things we use today like GPS, the internet, and advanced semiconductors are all horses from this stable. By contrast, the economic ascendancy of western countries only really declined after the tax and regulation reforms of the Thatcher-Reagan years when Proud Finance finally crushed Humble Industry.

Why does this all work? Because ultimately the State is able to take a risk which private enterprise capital cannot. We don’t blame them: this is not a moral failing, just a question of numbers and distributed risk. Its true that in some countries private banks have a much more supportive relationship with their local industries: but these tend to be lands where such innovations as Regulations and Industrial Planning are celebrated, and not seen as wicked socialist evils. Leave aside the fact that taxes pay for the roads, hospitals and schools which provide entrepreneurs with a ready supply of able workers. Their real benefit is to create a vast pool of opportunity in which enterprise can afford to reach losses and profits in turn, and keep coming back for more. After all-what use is a football club without a League to play in? We will be revisiting these and other thoughts in the last of our series. Hold on to your seats.

[1]https://www.federalreservehistory.org/essays/wwii-and-its-aftermath

[2]https://www.darpa.mil/research

#fiscal #tax #financialisation #keynes #second world war #inflation #research and development #history #economics

World Government: Great Idea or daft fantasy?

We’ve passed a little time this year discussing the idea of a World Government. In our series which began back in January[1] we looked at the basic idea. Many of the world’s problems, we opined, were transnational: mass migration, climate change and pandemics are only a few. Nation states were no longer big enough to solve these on their own, we said. Or rather, their existence precluded the solutions, in any reasonable time frame, which would permit human survival. We also noted the terrible danger of a World State[2] : that it could quickly engender an tyranny even more terrible than those of Robespierre or Stalin: and this time with no where to escape to at all.

We spent some time discussing the idea both in these pages and with friends and acquaintances. We received some surprising responses. Even some quite hardened nationalists and Europe-bashers thought we had a good idea, but that it was utterly unfeasible in any meaningful time frame. We think that they are probably right. For another trope of these pages has been the depressing tendency of humankind to divide itself in to mutually loathing groups, over issues both large and small. We have looked at the work of thinkers Like Amy Chua , Eric Kaufman and David Ronfeldt{3.4] We looked at studies like the Robbers Cave Experiment [5] which seem to provide the essential psychological underpinning to these writers’ ideas. All of the foregoing made us feel that our sceptics had the point, and that our Big Idea was, if not wrong, then at least hopelessly impracticable.

It is the to the credit of Great Big Ideas that even when wrong, they can point the way to fertile new investigations, if they are catchy enough. No one thinks Henri Pirenne said the last word on Medieval Economics, not Freud on psychiatry. But it was the achievement of these scholars to make their ideas so strong that they challenged further studies, if only because some were so eager to prove them wrong. It is in this spirit that we shall turn to looking at some questions we have raised. Is the Nation State, which has served us so well so far, really constrained ? Can people from different groups and identities not only sink them into a common cause but actually achieve something thereby? These will be some of the the in the months ahead. And while you are waiting, don’t forget: problems like antibiotic resistance, climate change and mass migration will be getting worse.

[1]LSS 1 8 25, 14 1 25 et al

[2] LSS 22 1 25

3 LSS 16 8 20

4 LSS 10 3 21

[5]LSS 1 4 25

#world government #nation state #economics #politics #tribalism #amy chua

Why Taxes are good for you #3: look what happened to China

One of the great disadvantages of low taxes is that you end up getting conquered. As China learned at terrible cost. In the eighteenth century Qing China had been one of the greatest states in the world:, rich and populous, with booming trade, advanced techniques in agriculture, and envied craftsmanship Taxes were low, less than 5% of GDP it is estimated. So was military spending. And there was the problem. For nations in the west, like Britain for example, ran at much higher tax burdens, perhaps 15-20% GDP. With the result that they could pay for vast armies and fleets which captured all the world’s sea lanes and trade routes. It’s true that the most advanced western thinkers were classic Liberals like Ricardo and John Stuart Mill, who loudly proclaimed the virtues of low taxes and a minimal state. It was just that no one serious paid any attention to them. The result that these fleets and armies were eventually flung against China. The resulting Opium Wars were not only one of the most terrible crimes in History, they disgraced and destabilised China until 1949.[1] [2]

It was a lesson the British themselves had to relearn after the rise of Hitler forced them into frantic re-armament after 1937. After nearly two decades of orthodox economics like the Gold Standard and low taxes, suddenly the latter began to rise. Fast. All those Spitfires and cruisers and radar had to come from somewhere. So in 1938 the standard rate of income tax was raised to 27.5% (5s 6d in the pound) to help fund rearmament. A 41% surtax applied to very high incomes (over £50,000 annually), targeting the wealthiest. Other hated impositions like death duties and PAYE *were imposed. And -despite what it says in the Daily Mail-it worked. Not only was just enough done to survive the perilous summer of 1940, by 1944 Britain was the most fully mobilised of all the wartime economies. Pride indeed.

Yet there is a little irony at work here . It is our lived experience that those who most loudly proclaim the greatest patriotism are also those who would avoid paying taxes wherever and when ever possible. It is their right to say such things. But ours also to at least doubt the sincerity of a patriotism which will not pay to uphold that which it professes to adore.

_{*Pay as You Earn}

[1] Thomas Piketty Capital and Ideology

[2] David Ricardo Principles of Political Economy and Taxation

#taxation #economics #liberalism #free markets #imperialism #opium wars #china #britain

Depressing Diptych for November #2:Falling vaccine rates

As the sun sets on the Americas, politically and economically, a new and insidious trend is only going to add to their problems. Read this from the ineffable Nature Briefing: Canada loses measles elimination status

Canada no longer holds measles elimination status after experiencing a cross-country outbreak that has persisted for more than 12 months. By default, this means that the entire Americas region has also lost its status. Infections took hold in undervaccinated Mennonite communities where the COVID-19 pandemic eroded already-shaky trust in the healthcare system — a shared source of recent measles outbreaks in the United States. The number of new cases is going down, but the loss is “a giant wake-up call that we have gaps in our public health infrastructure”, says physician-scientist Isaac Bogoch.CBC | 6 min read

If only it were just them! But it’s now a world-wide trend. According to a recent report by the WHO,[1] Measles cases rose to 10.3 million in 2023, a 20% increase from 2022, with outbreaks intensifying into 2024 and 2025. No less than 138 countries reported measles cases in the past year, with 61 facing large or disruptive outbreaks—the highest since 2019. Meningitis and diphtheria (horrid afflictions) are also re-emerging, particularly in regions with strained health systems and declining immunization coverage. And the causes? Funding cuts and humanitarian crises for one thing Access barriers, especially in marginalized communities, for another But the prime one, and most baffling to us, is our old bugbear: Misinformation and vaccine hesitancy, A fact well illustrated by a similar study from Europe which showed that vaccine hesitancy among adolescents and parents ranges from 12% to over 30%. We invite you to research more, gentle readers.

And so combining with the previous part of our Dreary Depressing Diptych of dispatches (that’s enough D’s-ed) we get a truly dismal picture of this species which has the barefaced cheek to call itself “sapiens.” If an tiger came to you an announced it was was giving up its stripes, you would counsel “don’t do it-if you throw away your principle evolutionary advantage, you will get no dinner!” Similarly if a spider monkey were to forego the use of its tail, or a real spider its web. But humanity seems determined to forego the use of its principal evolutionary advantage, its brain. Palaeontology will record what comes next.

[1]https://www.who.int/news/item/24-04-2025-increases-in-vaccine-preventable-disease-outbreaks-threaten-years-of-progress–warn-who–unicef–gavi

#vaccine #measles #diptheria #medicine #health #childhood disease

Fear, despair and loathing as the last drops of 20th Century Politics drain away

If ever there was a journalist whom we have learned to take seriously, it is John Harris of the Guardian. He it was, along with film-maker John Domokos , who first went round the people in the heartlands of Britain in the 2010s. And thereby revealed the depths of bewilderment, rage and despair that now lurk ubiquitously just below the surface of our national life. “Anywhere but Westminster” they called their work, revealing the deep cleavage between the formal politics of governance and the real feelings of most voters. His article which we riff on for you today, gentle readers is a neuralgically painful contrast between the increasingly empty rituals of the nation’s leaders and an ever more bloody-minded and fractious populace. [1]

Being a thoughtful sort of chap, Harris goes deeper. suggesting that this explains the sudden rise in the fortunes of formerly small parties such as the Greens, Reform, Plaid Cymru and the others. And the agonising decline in the fortunes of those two stalwarts of 20th Century British politics, the Conservative and Labour Parties. He cites the obvious causes- a stagnated economy, changing identities and “the failures of the various administrations that have run the UK since 2008” And this:

The essential point was made a few days before Reeves’s speech by Luke Tryl, the UK director of the thinktank and research organisation More In Common, and someone with an incisive understanding of where we have arrived. “I still don’t think enough people realise how much traditional mainstream politics is in the last chance saloon, in no small part because it can’t be trusted to deliver what it promises,” he said on X.

Why has every single administration failed to deliver the things people want? Governments in the last century used to deliver quite acceptable levels of health, defence, housing and so on.. Here we move beyond Harris (we never put words in others’ mouths) to our own speculations, touched on in our blog Pity poor Rachel Reeves, LSS 23 10 25, and earlier ones in this vein. Remember how we said every nation state, even the richest, are plagued with such debts and poor economies that they no longer have any room to seriously mitigate the lives of their citizens? That the combined weight of investment capital, expressing its power in things like bond and currency markets, could stymie the efforts of any finance minister? Could it therefore be that the Nation State, which has hitherto served us so successfully, is no longer an effective vehicle to manage the the lives of its citizens? It is a terrifying conjecture: for we have no idea of what may replace it. But one thing we do remember: read everything you can lay your hands on about the collapse of Yugoslavia, and what followed.

[1] https://www.theguardian.com/commentisfree/2025/nov/09/21st-century-politics-labour-tories-turbulence-green-party-reform

#nation #country #politics #governance #finance #currency market #bond market #populism

Nobel Prize for Economics shows this blog was right all along

Back in the dark days of January 2021, when the world economy was reeling from the savage hit of the COVID-19 pandemic, we published a short blog called How to Get some Free Money(LSS 2 1 21) Everyone at that time was worried about the colossal debts their governments had run up to pay for the catastrophe-were we all to be bankrupt for ever? Our point was that Science and Technology were the key to economic success. Encourage them. and you will grow your way out of debt. However hard a medieval peasant worked and saved he could never hope to achieve the productive levels of a man with a steam driven plough.

How comforting then, to find that better, more profound minds have demonstrated this truth at a Nobel level. By incredibly detailed studies Joel Mokyr, Phillipe Aghion and Peter Howitt [1] have looked at archives, crunched the numbers, weaved out feedback loops and carried out any number of other careful ratiocinations to prove the point. You can read more here [2] if you like graphs and words and things. But for us three things stand out.

There has to be abstract learning first. Many of the ideas and processes that drove the industrial revolution had appeared a hundred years before as the abstruse discoveries of thinkers like Newton and Hooke, which the average man in the street would have called “bonkers!”. There has to be a social ecology of skilled and trained workers, able to quickly deploy and develop the new ideas. In the eighteenth century this meant craftsmen like watchmakers and weavers. Now it means experts in AI and biotechnology. Finally a society must be open to rapid change: and welcome it where possible. For if you do not, someone will rapidly steal your markets with a new idea you could have developed but didn’t, because the old ways were tied and tested(think Kodak and digital cameras) [3]

All of which has relevance now, especially in the United States of America and the UK. In both those countries there is a growing movement to throw over renewable energy technologies and move back to coal and oil as soon as possible. We understand the fears and share some of the nostalgia for a bygone age which the proponents of this U turn so plainly demonstrate, Yet we also recognise that other countries will not. They will adapt clean green technologies rather fast. Not only will this leave the Anglo-Saxon economies hopelessly far behind. Their pollution will also make them a dangerous threat to other places in the world. Places which may seek to shut down that danger by whatever means necessary.

[1]https://www.nobelprize.org/all-nobel-prizes-2025/

[2]https://www.nobelprize.org/uploads/2025/10/advanced-economicsciencesprize2025.pdf

[3]https://www.forbes.com/sites/chunkamui/2012/01/18/how-kodak-failed/

#science #technology #growth #innovation #digital cameras #renewable energy

Hello we’re back-and we have Nobel Prizes!

First of all, apologies for our forced and utterly unwanted absence. But Domestic Renovations, and the sorts of people who carry them out, can be as tiresome and time-consuming as any other human relationship which the Gentleman Scholar must negotiate -domestic staff mistresses and lovers, cleaners, mechanics, and countless others. All require patient listening, multiple cups of tea and hefty pay offs, if only to still their incessant demands for even a moment. But here we are back again where it counts-with you, gentle readers. And we are glad to say that we return with one of our favourite sequences of the year. It’s Nobel Prize season again. [1]

For us, the Nobel prizes are the very essence of what this blog is all about. That careful learning and scholarship are not only what lifts our lives above the miserable condition of wild apes (well, some of us): they constitute the only only possible escape route from our current plights, many of which are serious and grave. And this time we think we can prove it. with the help of three of the very winners themselves-how’s that for endorsement, ladies and gentlemen? That’s the prize which will receive our first detailed attention, in the next blog: but let’s start with a roll call of the stupendously intelligent people who have stood out this year as the cream of humanity

Physics: John Clarke Michel H Devoret John M Martins Amazing work “for the discovery of macroscopic quantum mechanical tunnelling and energy quantisation in an electric circuit” Yup, we kind of lost too it after the fourth word in the citation, but we’ll try to understand it better in time for a later blog

Chemistry Susuma Kitagawa Richard Robson Omar M Yaghi Want to capture Carbon dioxide, water in the desert, store toxic gases and many other things? These discoveries will let you do all of them. If this isn’t right on the raison d’etre of this blog, we don’t know what is. Again, come back later for more

Physiology and/or Medicine Anything in these fields must be close to an LSS reader’s heart. So the work of Mary E Brunkow, Fred Ramsdell and Shimon Sakaguchi on the tricky world of the immune system requires our most emphatic hats-off

Literature and Peace Intelligence can be of the Emotional kind as well as the academic, as many of us discover with agonising slowness and pain. So although these subjects lie outside the remit of our blog we are proud to give honourable mentions to László Krasznahorkai and Maria Corina Machado respectively (is she a relative of Antonio Machado the famous Spanish poet, we wonder?-ed)

But finally our first next blog on this subject, as t’were, will be devoted to the patient Economics work of Joel Mokyr, Phillipe Aghion and Peter Howitt. Because finally they have shown at Nobel level, what we have believed for so long. It’s science and learning that drives the economy. Which is where we go next time.

[1] https://www.nobelprize.org/all-nobel-prizes-2025/

#nobel prizes #economics #physics #chemistry #medicine #physiology #economics

How climate change drives the return of deadly diseases

We never thought we’d see it. But Malaria is making a comeback in the British Isles [1] According to the latest findings from the UK Health Security Agency(UKHSA) cases rose by a whopping 32% from 2022 to 2023 making them the highest in 20 years. More than 2000 cases in fact. Now some of this is due no doubt to travel bounce backs after the COVID 19 pandemic. But once put into a broader context. the real pattern becomes both clear and alarming. Global warming is driving a massive spread of insect vector diseases. Dangerous diseases that almost seemed under control until the oil companies unleashed climate change on an innocent world

Staying with Britain just for now, William Hunter of the Mail [2] reports on the appearance of two deadly mosquitoes in the UK: the Egyptian mosquito Aedes aegypti and the appropriately named Tiger mosquito Aedes albopictus. For now these are isolated events, and under current conditions their spread may even be containable. But every year the climate gets a little warmer. Every year brings a higher chance that these vectors will spread their deadly triple load: Dengue Fever, Chikungunya and Zika. With all the consequences which wel- seasoned readers of this blog will recall from our earlier outings on this theme (see LSS 25 3 25, 25 10 21 and many others)

We confess to becoming a little angry when we we write stories like this: such disasters could have been so avoidable. Once, not so long ago these diseases were unknown in this islands except as travellers’ tales, or as the province of medical specialists. Now a wave is crossing the world. We know what the remedy is. If by any chance you are a parent reading these lines: this story is one more line of evidence among many. Your children can never be truly safe until global warming is finally controlled and reversed.

[1]https://ukhsa.blog.gov.uk/2025/05/21/how-we-protect-the-uk-from-vector-borne-diseases/

[2]https://www.dailymail.co.uk/sciencetech/article-15151429/tropical-diseases-britain-mosquitoes-dengue-fever.html

[3]https://wellcome.org/news/how-climate-change-affects-vector-borne-diseases

#disease #malaria #dengue fever #climate change #g;obal warming #health

Co-LAB-oration, or why its good news UK is back in Horizon

Science is good for economic growth. It’s theme we’ve touched on before in this blog(LSS 4 10 23; 1 3 24) So any initiative that builds on this incontrovertible fact will meet with our approval. if only because we want a higher standard of living next year. Which is why we showcase this article by Lisa O’Carroll of the Guardian [1] which reviews progress of the UK’s revived membership of the EU administered Horizon Programme, which tries to bring together the efforts of scientists technologists and scholars from across many countries.

It may soothe the objections of our more rabid eurosceptic readers, to learn that almost half the members (20:27) are not in the European Union, but are located as far afield as Canada and New Zealand (“is that Bri’ish Empoire enuff fer yer, Guv?”) But because science is a collaborative process it helps if you can recruit your teams from close neighbours, if only because it saves on things like travel costs on the day of the interview. We need not discourse long on close financial and technological links as Lisa covers them well in her article. It’s a cultural link of a different stripe which makes us think that rejoining was the right decision.

For what the UK and its fellow members have in common is that they are open societies, where information and people flow freely. The other possible partner, the USA, is showing strong signs of both damaging the free flow of information as well as launching major attacks on both the funding and the very work of scientists, as our readers well know. The Horizon programme and the countries that contribute, are the genuine heirs of both the Renaissance and Enlightenment. Societies that abandon the practice of truth and reason soon fall into cultural and economic stagnation. Just as being in UEFA is a sound bet for British Football Clubs, so is Horizon for British Universities. A good news day forr once

[1]https://www.theguardian.com/science/2025/aug/12/uk-recovers-position-horizon-europe-science-research-eu-brexit

[2]https://commission.europa.eu/funding-tenders/find-funding/eu-funding-programmes/horizon-europe_en

#science #technology #economics #EU #UK #renaissance #enlightenment #donald trump

The economic costs of antibiotic resistance

Down the years we’ve tended to cover the health risks of antibiotic resistance , and the various scientific and medical developments in the field. We haven’t written so much on the economic risks. And frankly, that’s been a blind spot.

Now a very clear sighted article by Anna Bawden of the Guardian[1] makes those potential costs very clear indeed. Drawing on report from the prestigious Centre for Global Development [2] Anna serves up some chilling facts Get this:

A UK government-funded study shows that without concerted action, increased rates of antimicrobial resistance (AMR) could lead to global annual GDP losses of $1.7tn over the next quarter of a century.

Breaking it down by countries:

The research calculated the economic and health burden of antibiotic resistance for 122 countries and forecast that in that in this most pessimistic scenario, by 2050, GDP losses in China could reach just under $722bn a year, the US $295.7bn, the EU $187bn, Japan $65.7bn and the UK $58.6bn.

That alone should give the thoughtful 5% of us pause for thought. But it’s Anna’s background which makes this a great article. For it comes at a time when countries like the USA and the UK are busily cutting their overseas aid budgets. Which is shows a worrying lack of self interest on their parts. For one thing, antibiotic resistance will not be confined to poorer countries: but it is much more likely to develop in them. Secondly, being at the forefront of pioneering science can spin off the most amazing business and technological opportunities for the more astute kind of entrepreneur. And thirdly, and most acutely for their voter base: if the health system in those poor contries collapses, guess where their populations will pitch up? “Stands ter reason,dunnit, mate?” as our old friend Dave Watford is fond of stating. Thanks, Dave- you’ve got it right this time.

[1]https://www.theguardian.com/society/2025/jul/20/superbugs-could-kill-millions-more-and-cost-2tn-a-year-by-2050-models-show

[2]https://www.cgdev.org/media/forecasting-fallout-amr-economic-impacts-antimicrobial-resistance-humans

#antibiotic resistance #health #medicine #economics