Why taxes are good for you: part #1 of a new series

Next to the arrival of immigrant persons, nothing so exercises the anger of our old friend Dave Watford and his mates at the Dog and Duck as the imposition of taxes. All taxes. Any taxes. Death duties, sales taxes, income taxes……the mere mention of the “t ” word is enough to unleash paroxysms of indignant wrath. As we have heard it so many times we think we can give a fair summary of their case, which goes like this

I’ll tell you what’s wrong with this country, mate —taxes. I work hard, and they just take it. For what? So some bloke in a suit can sit in an office pushing paper? I don’t see any of it. Roads are still full of ‘oles, the(expletive deleted) NHS is on life suppawt, and don’t get me started on foreign aid. They say it pays for schools an ‘ospitals—well I haven’t been in school for 40 years and I haven’t seen a(expletive deleted) doctor since ’98. Why should I pay for stuff I don’t use? And all these entrepreneurs, they’re the ones wots creating jobs. Government just gets in the way. If they cut taxes, we’d all be better off. More money in our pockets, less wasted on(expletive deleted) bureaucracy.

Dave, despite the obvious logical fallacies in your arguments. we respect you! We know you and your kind work hard and on the whole put in more than you take out. We know how your lives are centred on family and community, and that the world can seem a harsh, bewildering place. But can we, dare we, just take a short time to offer the counter-intuitive case? Just because every argument by its nature always carries a counter point.

For we believe that taxes and their imposition do more than pay for armies, police and courts (which they do). We believe they do more than generate economic growth (and we will show that they do indeed) That they create more stable societies-and we have strong evidence for that. But what we really believe is that the idea of taxes lies at the very beginnings of Civilisation, and are what made it possible to rise above the level of stone age farmers and grangers. It’s that profound. In the next few weeks we shall be running a series of blogs which explore these themes. If only for the sake of balance. In the meantime compare Finland (top tax rate 57.65%, rigidly enforced) with Chad (top tax rate 30%, barely enforced), and answer these questions:

1 Which has GDP per capita of a $53 189 and b which $1420?

2 which of the two boasts a universal healthcare, free education, strong infrastructure, low corruption. and which b Fragile institutions, limited public services, poor infrastructure, high corruption.?

3 Which of the two do you think has Higher life expectancy, lower infant mortality, combined with top global rankings in happiness and education?

ANSWERS TO QUIZ

1 a Finland b Chad

2 a Finland b Chad

3 Finland

#economics #tax #infrastructure #growth #GDP wealth creation

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

Steve Schifferes Part 2: where the next crash might come from-and the chilling consequences

Photo by John Guccione http://www.advergroup.com on Pexels.com

Our earnest recommendation of the second part of Steve Schirreres’ excellent diptych of articles for The Conversation

As Britain declined after world war one, no other power replaced it with the necessary financial, military and cultural power necessary to avert the political and financial instability that followed. The result was revolution, boom, crash and depression, leading rapidly to the Second World War. “Ah!” we hear you say, “Ah! That could never happen again. Look for example how well the world did to wriggle out of the consequences of the financial crash of 2007-2008!” But that, gentle readers, is to beg the question. For back in those days the world had two shots in its locker which are now fully fired. First, a spirit of co-operation among the great powers which let them co-ordinate rescue plans quickly: and the trust to make them stick. (Schifferes is rather good on this, having had a ringside seat) Now Mr Trump has declared that he will only ever consult American national interest. He may have valid domestic reasons for taking this line; but it will make any recovery from a future recession very much harder indeed.

Secondly, the America of those days still had deep and unrivalled capital markets, which enabled its Federal Reserve to act as a lender of last resort to the whole world. And this is where Schifferes gets really interesting. Firstly he details deep worries about the long term stability the US Bond market and the dollar. Remember- a hegemon needs both bonds and a currency to ensure global stability. Combine this with the threats to the US Stock market( a concern to many commentators at the time of writing) and you have not only the elements for a perfect storm, but no obvious lifeboat to climb into when it strikes.

If you want to know how the world really works, and get some glimpse of where it might be heading, then these articles are a must read. And remember- next time you get cross because the train is late, or service slow in your local restaurant: these troubles may be slight compared to what is coming down the line.

[1]https://theconversation.com/the-rise-and-fall-of-globalisation-why-the-worlds-next-financial-meltdown-could-be-much-worse-with-the-us-on-the-sidelines-267920?utm_medium=email&utm_campaig

#economics #history #US Bonds #dollar #trade #globalisation

Is Globalisation over? Steve Schifferes worries what comes next

Recently the residents of the Canadian State of Ontario irritated US President Donald Trump by running a series of TV ads showing former President Ronald Reagan disparaging trade tariffs,. Why would such hero of the global Right have taken such a heterodox view? The answer is that Reagan thought that free trade was the best way to distribute prosperity as widely as possible. Under the hegemonic power of the United States of America of course. And he had good evidence for this belief, as Steve Schifferes makes clear in this article for the Conversation.

Schifferes is such a good writer. His sentences are always short and to the point, He keeps away from jargon. Which clarity allows him to range over the last 400 years or so of history tracking the rise and fall of the various powers-China, France, The Netherlands, Britain the USA all of whom aspired to the hegemonic position in world affairs. In the first of two such called The Rise and Fall of Globalisation: the battle to be top dog he comes to one overarching conclusion. Things go better, and the world grows when there is one such dog. The period of British dominance , roughly 1815-1914 was marked by ever closer union of world markets and ever greater flows of capital and people. The American hegemon, roughly lasting from 1944 to 2016 was a second such example. The great problem for the world was that, as Britain stepped down in 1918, the USA did not step up to the plate. Leading to two decades of deep economic and international stability that culminated in the most destructive war in History. This one we shall urge you to read, gentle readers. It not only describes, it explains.

And now? Populists everywhere not only proclaim that globalisation is dead, they actively seek to undermine it wherever possible. Tariffs, restrictions on free movement of goods and people, hostility to learning and science-all indicate the flow of history is one way. Yet populist nationalists can point to one overarching weakness in the globalists argument. The whole system when it worked, depended on the successful nationalism of one nation,the hegemonic power. Their nationalism was a good thing. From which many concluded “if nationalism is a good thing, we want some of it too.” So as the hegemon declines, as America now does precipitously, they will assert their own nationalisms more and more. World war Three anyone?

[1]https://theconversation.com/the-rise-and-fall-of-globalisation-the-battle-to-be-top-dog-267910

#steve sciffereres #history #economics #trade #USA #war #globalisation

Pity Rachel Reeves-but Britain’s problems are as dreadful as everyone else’s

Pity poor Rachel Reeves, Britain’s beleaguered Chancellor of the Exchequer (that’s what we call our finance minister). According to Larry Elliott of the Guardian, [1] she faces some agonising choices as she tries to prepare November’s Budget. Being a British Chancellor has never been all beer and skittles. And Larry’s dissection of the fiscal and financial constraints she faces , to say nothing of organisations like The Office for Budget Responsibility (OBR) or the Bank of England breathing down her neck is as succinct and percipient analysis as you will get of the economic landscape of Britain today.

Or any where else. All the advanced nations seem to be in dreadful trouble at the moment. The USA, France, Italy: even the once vaunted Germany and Japan seem be in the same mire of rising debt, financial constraint and absolute inability to deliver the rising standards of living, education and health which their citizens had come to expect. Why do finance ministers suddenly seem so powerless?

They can still control some things of course: fiscal policy , debt issuance, regulatory frameworks and co-ordinating policy with Central Banks. What lie outside their control are immense things like global capital flows, stock market volatility, commodity prices and private investment decisions. At the time of writing over 80% of the world’s investment capital is in the hand of things like Hedge Funds, Sovereign Wealth Funds and Family Offices, as well as less shady entities such as pensions and mutual funds. And this has had very real consequences. For us Elliott’s key paragraph was this rather neat summary of the history of the world in the last twenty five years:

……..the big moves in inflation in recent decades have been globally rather than domestically driven. There was a long period in the 1990s and early 2000s when globalisation led to much cheaper imports, especially from China. More recently, the main reason inflation shot up above 10% was the sharp increase in gas and food prices caused by the war in Ukraine. Trying to hit a specific inflation target using the blunt instrument of bank rate is a mug’s game.

Which raises the question: is the Nation state still the best vehicle to deliver the thing its citizens really need? It’s a big question and the answer may not come down to a simple yes/no. But if it is to succeed, the nation must be immensely strengthened and reformed. Who will do it?

[1] Rachel Reeves is the face of this budget. But the really big decisions are not in Labour’s hands | Larry Elliott | The Guardian

#economics #history #inflation #rachel reeves #UK #Germany #France #finance #money #capital

If all the wealth in the world were shared out, what would happen?

Many decades ago, we often used to hear the argument “if all the money in the country were shared out, everyone would only get 20p” A tiny sum, which could not make any difference to daily life. This was the UK in 1973, Perhaps it was true then, there. Is it true of the world as a whole today?

The statement itself is a cognitive howler: because it equates wealth with money, carefully avoiding the inclusion of all the goods, capital infrastructure(IT systems, railways, etc.) and productive resources such as factories that make up the wealth of the world, which is best expressed as GDP. When we set out to find what that was, the best estimate was from the World Bank,[1] who put it at $105 trillion in 2023. Now, the population of the world is around 8 billion (8×10⁹) people. What would happen if we found a way to share that GDP among all of them? The answer is: everyone ends up with an an income of $13 125 a year. Which surprised us greatly. Instead of being insignificant, its actually quite a lot. Let us explain why.

That same world bank defines four categories of national income by GDP. Low: $1 135 or less. Lower Middle: $1 136-$4 465. Upper Middle: $4 466- $13 845. High: $13 846 and anything above. There is enough wealth in the world to raise everyone almost to the level of high income countries, certainly to the very top of the middle range.

Now there may be very good reasons why this cannot be done. Some are practical. Some are moral. But if it were done, what difference might it make to such issues as mass migration, educational attainment, and the overall level of demand in the world economy? Let alone health, security and basic nutrition. Just a thought.

[1]https://ourworldindata.org/grapher/gdp-worldbank

#wealth #GDP per capita #economics #inequality #migration #health #geography #economics

The Slippery Slope fallacy: the one we’ve never got on with

“Don’t throw that rubbish there! Put it in the bin like you’re supposed to!” Many years ago we lived on a pleasant private estate in West London with trimmed lawns, walkways, security, a residents association, all those sorts of things. The only problem was some of the residents, who were either too lazy or felt culturally compelled to throw their domestic rubbish down by the rubbish chutes instead of putting in properly, as we, the decent majority did. This bad practice spread, being quickly copied across the estate and soon we all had a widespread problem with flies, rodents and an ugly disfigurement of our pristine areas. It’s called the slippery slope. Another example is when the office agrees to step out for a single drink and, three hours later, the entire company ends up blind drunk ,broke and embracing each other with varying declarations of love. Everyone copies bad behaviour, because they feel entitled, or are missing out. And so crime, disorder, drugs and violence spread quickly through communities, reducing everyone to common beggary.

And that raises a bigger problem for us here at LSS. For years we have proudly touted our Enlightenment, Whig, rational, call them what you will credentials like a badge of honour. Central to our purpose, hardened readers will recall, is the practice of reason and logic. Avidly do we follow websites like your logical fallacy which are stuffed with every classic example you could wish for: post hoc propter hoc, texas sharpshooter, all shining beacons of clear thought each one of them.. Standing out like a dead rat in a melon souffle is the slippery slope, of which the authors state

Allowing to happen will cause Z to happen: therefore we should ban A now!

Yes, we see the error. The slippery slope is a fallacy for it allows one to jump to conclusions without checking each intervening link from A to Z for both logic and empirical fact. Its the classic howler of someone like a Daily Mail columnist, carried away on tides of hysteria and dread. The trouble is: it’s how humans really behave. It’s the way most of them are.

So our problem with the slippery slope mirrors a more general problem. Reason, learning, and all the the qualities which we prize are not always good guides to how society works. (Try a Friday night out in Croydon if you don’t believe us) Yet the values we espouse are the only ones which will ensure not only the good life but also human survival in the long term. The problem we now have is how do we form a critical mass to allow those values to prevail?

[1]https://yourlogicalfallacyis.com/

#logic #fallacy #reason #slippery slope #enlightenment

1st September 2025: the day world history changed forever(you did notice, didn’t you?)

Today, or yesterday (it’s all a bit muddled what with time zones, deadlines and so on) world history changed forever. Because the two biggest powers on the planet have started to come together. Making Asia potentially one huge zone of economic co operation. the true centre of economic and political power in the world. Yes, Mr Xi and Mr Modhi have started to talk about the joint efforts of 1.416 billion Chinese and 1.464 billion Indians. all increasingly prosperous and tech hungry. All of which trumps the 347 million Americans who so recently seemed to have the world game so utterly in their hands(anyone remember George W Bush?)

Ah, critics might say- but look at the GDP figures. America at $30.51 trillion is still comfortably ahead of both its enemies combined($23.4 trillion) But a Briton in 1900 could have pointed to similar figures which showed how rich they still were, ignoring the growth potential of rivals like the USA and Germany. And ominously, the current USA is in a bad position here, with 1.9% against China’s 4.0 % and India’s 6.9% The conclusion is obvious; the USA is fast on the way to becoming a regional, local power. It’s days of strutting the world like a colossus are over, or very nearly so.

And how has this come about? There have been long term trends of course. Growing inequality. political polarisation and corruption of its legal system have been in evidence since 2000 at least. The Iraq war of 2003 was an epic blunder and the crash of 2008 fatally undermined the rationale of the American order. But until recently America still represented an open democratic country Rational independent institutions. inalienable Rights , Something worth fighting for, both for its own people and for its allies. But now those allies are humiliated . [2] Others, not allies but still potential partners, alienated by irrational and erratically applied tariffs, rush to form their own blocs and trading systems. It was easy to believe that Mr Trump and his policies made sense at least from the point of view of their own country. Now the damage is not only deep, it is permanent. Welcome to a new world order.

[1]https://www.bbc.co.uk/news/articles/cp37e8kw3lwo

[2]https://www.independent.co.uk/news/world/americas/us-politics/trump-tariff-ass-kissing-nrcc-hannibal-b2729968.html

#china #india #usa #donald trump #narendra modi #Xi Jinping #geopolitics

Is all the money in the world running out?

Is the United States of America about to go bust, the way that previous empires like Spain and Britain did? Critics point to astronomical levels of government debt ( it’s now a whopping 123% of GDP) and ballooning trade deficits. Exactly the opposite to the US position just over one hundred years ago when it elbowed aside Great Britain to make Uncle Sam the dominant world player. “Ah”, counter the critics” if you have the world’s reserve currency you can issue as much debt as you like. And the fact that America has independent institutions makes its bonds the safest bet in the world for foreign investors”. So-no problem then? Perhaps. The trouble with debt is that it’s OK until it isn’t. As interest rates start to rise (as they have been doing for some time) the rising costs crowd out all sorts of fiscal flexibility. Especially on crucial issues like defence, health and education. As for the United States much vaunted institutions- recent events have put their independence in very great doubt indeed. [1]

But before we heap all the opprobrium on poor old America, don’t forget everyone else is doing it too, Japan is running debt at an eye watering 250% of GDP: while in France things are so bad , there are even rumours that they are flirting with an IMF bailout[2] If stalwarts such as they are in such deep trouble, what hope for less prosperous nations? The answer, chillingly, is not much. According to a report by Schroders [3] the levels of sovereign debt around the world are so high that they represent a real risk to future investment, growth and healthy trade. In effect the repayments will come to stifle most normal economic activity. Though the authors are careful not to go quite this far, what worries us is that if this activity slows, then there may be a real risk that many nation states may become structurally unable to ever repay their debt. If sovereign bond markets cease to function there is no real stable credit, In effect. all the money in the world has run out. The political, social and military consequences of that would be interesting indeed.

[1]https://edition.cnn.com/2025/08/29/economy/trump-fed-turkey-argentina

[2]https://www.theguardian.com/world/2025/aug/27/france-on-the-brink-political-crisis-economic-francois-bayrou

[3]https://www.schroders.com/en-gb/uk/institutional/insights/sovereign-debt-dynamics-the-alarming-backdrop-to-rising-geopolitical-risk/

#sovereign debt #USA #japan #france #economics #finance