Tuesday, August 28, 2007

Wild World

Hippies. What can you do with 'em, eh? One way or another, they always reckon they can save us from that wild world.

Well, of course, in 1971 there was some excuse for believing. The Vietnam War was still on, and we hadn't yet experienced the full horror of the kipper tie. Let alone Class A incomes policy, the three day week, and the Winter of Discontent.

But now we're in 2007. We know about some stuff shrouded in mystery back then. Like the fact that government is incapable of delivering even one-tenth of what it promises, and that our prosperity is entirely dependent on private enterprise.

So how can it possibly be that some highly intelligent, very well informed people, still seem to think that the way forward is more government and less private enterprise?

Is it perhaps because private enterprise is teeming with grasping, self-serving, lying, cheating banditos who want nothing more than to rob grannies and destroy the planet?

That's certainly part of it.

Richard Murphy, who runs the excellent Tax Research UK, is in no doubt. He campaigns for what he calls tax justice, and among other things, was probably instrumental in getting the FT to run yesterday's report on how a third of Britain's largest companies pay no corporation tax (based on warmed over figures that were taken from a National Audit Office report actually published six weeks ago).

Here's a sample of what Richard thinks about Britain's most successful private enterprise sector (30% of GDP etc):

"The financial services industry is not about achieving long term value for those who provide it with funds. It’s about achieving short term value for those in the financial elite who have hijacked the funds others have saved to provide themselves with an unethical reward."

On one level I agree with him. The City is out for itself. No question.

But so what? Surely nobody ever believed the City comprised Mother Teresa clones: it's the blood spattered coalface of global capitalism. Criminalise outright fraud of course, but otherwise it's caveat emptor.

And what's the real world alternative? The Commissars sitting in special all-night session, under the sea green chairmanship of Chief Secretary Andy Burnham, allocating pension fund assets to socially worthwhile investment projects? I don't reckon financial services would be generating 30%+ of Britain's income for much longer. But I do reckon the funds would get much worse returns.

No. There are certainly a lot of bad things out there, but in the real world, the seventies demonstrated beyond dispute that private enterprise beats government on virtually every count.

PS I've finally got round to reading Why Globalisation Works, by Martin Woolf. It gives an excellent account of why governments should restrict themselves to what they have to do- law and order, protection of property rights etc- rather than straying into broader areas where they do more damage than good.

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