I believe economics, and the way economics has shaped society in the past 15-20 years, plays a major role. Sure the young Corbyn supporter doesn’t understand economics, but point me towards a demographic that does. Every government in every western country is staring down the barrel of ballooning deficits, a debt which will take millenia to pay off, and not a single major party anywhere wants to even talk about it, let alone do anything about it. A simple reduction in planned expenditure increase is dressed up as a savage cut by damned near everyone: the Tories’ supposed austerity isn’t some fringe issue on the left, it is a widely accepted truth across the whole electorate. The people pointing out that these cuts are anything but are basically a handful of cranks on the internet. Like, erm, me. If any government program is threatened with a cut taking expenditure levels back to what they were in, say, 2010 half the country screams that medieval times are making a comeback and the other half believe them. The knowledge of economics among electorates is woeful, and almost all of them have signed up fully to the belief that all government expenditure is necessary, good, and wise and any cuts are bad. Nobody wants to even think about the size of the deficit and the national debt, it just keeps racking up. So if we’re going to criticise the young Corbynistas for not understanding the consequences of unsustainable economics demanded by ignorant voters, we might perhaps want to first ask where they got such ideas from. It’s too easy to blame Marxist indoctrination in schools when supposedly conservative governments, backed fully by the supposedly conservative middle classes, have been so irresponsible with public finances for several generations. Conservative governments might not be quite as reckless as Corbyn would be, but we’re talking about the difference between disaster and a catastrophe here.
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Samizdata quote of the dayJune 11th, 2017 |
 41 comments to Samizdata quote of the day |
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The always relevant Thomas Sowell:
Lots of Conservative voters also want ‘free’ stuff. Look at the reaction to the Tory’s recent social care policy, when it was proposed that people with houses contribute to the costs of their care after death via the sale of their house (after their death).
The reaction of a lot of supposedly right-wing voters was, ‘I worked hard to pay for my house, I want to leave it to my children, so why should my house be taken to pay for my care?’
These people may have worked hard to get their house, and it is awful to see the result of a lifetime’s hard work going on end-of-life care costs, but those care costs have to be paid for by someone, and if it’s not you, then it’s the taxpayer.
So they wanted their free stuff too, just as much as the students did.
All true, IMHO.A tipping point has been passed and a majority of the electorate are of the “free shit or die” persuasion. Which leads to a question: why am I commenting here, on a libertarian blog and why do I devote a not insignificant portion of my time and resources to agitating for libertarian policies?*
SWMBO and I have no children, therefor nobody to leave anything to (so it will be cats, though not people at crony cat foundations – which might prove tricky). We’re not rich, but we’re comfortable and it would take a catastrophic (in the mathematical sense) event for that to change before we shuffle off this mortal coil. While it seems likely that such an event must eventually come to pass (barring a catastrophic event in the opposite direction), we stand a good chance of riding out the rest of our lives before it happens.
We are likely not unusual, especially here. So why do we all do it?
* For those who focus on national and international matters, please remember that local governments can be just as illiberal as their bigger brothers. A city council can really fuck you up if you get in the way of their rampant statism. As I know to my cost – the cunts think that they’re the new barons and earls.
Amen, brother. Great quote. I’m no economist; I have no formal education in the subject at all (we didn’t even do it at school*), but what little I’ve learned from various sources over the last 15 years or so makes me Adam Smith compared to 99% of the population.
“The knowledge of economics among electorates is woeful, and almost all of them have signed up fully to the belief that all government expenditure is necessary, good, and wise and any cuts are bad.”
And this is weird, in historical terms. For the first time in history, low taxes and governmental austerity (where it even exists) are seen by the general public as harmful. I’m often reminded of the Terry Pratchett quote about teaching the poor to grind their own faces.
“the cunts think that they’re the new barons and earls.”
But that’s just it: they are. I’ve said before that IMO, this system we live under, variously described as socialism, statism, corporatism, or – most hilariously – democracy, is really a sort of neo-feudalism. We get an infinitessimally small say in who our lord is to be (usually a group of people rather than an individual), while “he” forces us to pay “him” tribute, and we grovel to “him” as supplicants for alms and mercy: a local “campaign group” pleads for the school or hospital to be spared, a bunch of council goons paint a no-parking zone outside your house without being asked, or the TV licence people knock on your door. Where’s the rule-by-the-people here? Buggered if I can see it.
*Maybe that was an advantage, come to think of it.
Lots of those older folks have a point: they’ve been forcibly paying into the system all their lives so why shouldn’t they get something back out of it towards the end.
Henry,
Depends on the age. Bear in mind those who were twenty when Blair come to power are now 40. A lot of people this age will have taken full advantage of the millions of non-jobs New Labour created, and paid for by borrowing.
“The reaction of a lot of supposedly right-wing voters was, ‘I worked hard to pay for my house, I want to leave it to my children, so why should my house be taken to pay for my care?’”
As HC says above, People who have worked for decades paying sky high taxes have some justification in feeling a bit miffed about it. If they are truly on the right politically, they would probably have preferred to have paid lower taxes and, as a consequence, had more money to pay for any care they might need. Unfortunately there are now no political parties that are not socialist. I see the modern Conservatives as being fairly hard left, hence my earlier comment about only voting for them because they are less bad than Labour.
They’ve been paying into a pyramid scheme, and many of them know it. They have no “right” to claim their piece of the scam.
We need to stop pretending that the rightness of our ideas alone will spread them. People live by personal narratives that define who they are. While both socialism and (classical) liberalism offer romantic world views that can fit into this, socialists actually promote theirs – heavily. We need to get off our arses and do the same. A genuine liberal group (potentially a party) is needed that doesn’t aim to promote the economics first, but the moral righteousness of our cause that can appeal to the masses.
People don’t understand economic issues, or rather they refuse to understand them, until it hits them financially in their own pockets, to the level where it hurts.
The ‘dementia tax’ was a classic example – here was a tax that a substantial number of the electorate suddenly realised would hit them. It wasn’t some vague tax they thought could be spread around on others and they would gain the benefits.
Lots of those older folks have a point: they’ve been forcibly paying into the system all their lives so why shouldn’t they get something back out of it towards the end.
What makes me laugh is how many of them think of it as some sort of investment upon which they will draw the dividends. They don’t seem to see that a Government which runs a deficit four years in every five (at least) isn’t going to be doing much “investing” with their taxes.
The ‘demantia tax’ is not a tax. It’s a direct payment of the costs — or some of the costs — of your own end-of-life care (for certain categories of people).
While I understand the mentality of ‘I’ve paid a lot in, so I want something out of it’, in the end this is just another demand upon the taxpayer.
Let’s face it, there is no end to these demands. Over time the taxpayer picks up more and more bills, and hardly any of them ever get dropped, so the burden on the taxpayer, and the future taxpayer, increases remorselessly. Seen those graphs of government spending over the last century? It’s just up and up and up. There is no prospect of it going down again, not through explicit government policy anyway, not when there are screams of outrage when even the rate on increase is slightly reduced. Eventually the whole thing is going to crash. You can’t run up increasing debt forever.
I worked hard to pay for my house, I want to leave it to my children, so why should my house be taken to pay for my care?’”
Part of why this argument may fall on deaf ears is because the value of their house has skyrocketted due to a deliberate policy of government keeping them skyrocketting in order to convince the middle classes they are wealthy. Many of the middle-aged and older are sitting on huge wealth piles in the form of property they did nothing to actually earn, and achieved only by voting for those who rigged the system in their favour at the expense of the younger generations. I’ve long thought this will come back and bite them on the arse one day.
So the ‘dementia tax’ is really a ‘land value tax’. 😆
Sorry Laird, I’ll get my coat…
I worked hard to pay for my house, I want to leave it to my children, so why should my house be taken to pay for my care?’”
They have some justification when the alternative is:
I’ve done bugger all except mooch off the state, and now I need care, I’ll mooch some more.
Johnnydub (June 12, 2017 at 12:37 pm) captures the political point: May was taking from natural working-class Tory voters and so relatively rewarding their benefit-scrounging-class enemies. That she and her advisers were all surprised by the reaction speaks to their cloth-ear problem.
If politics is about getting votes (in a democracy) to hold power, then all effort must and will be directed towards getting those votes. Everything else is window dressing.
If the population wants free stuff, then the winners have to promise more free stuff. In the case of immigrants with a new religion, they want their religion lifted up the pecking order, so it makes sense for the pols to give them what they want in exchange for votes (they also may want free stuff too — a god may be great but the needs on the human level still win)
In any event, promising free stuff is one thing. Giving it quite another. There’s usually a ‘crisis’ on the horizon which soon halts the flow of money and gifts outwards, but the ones who wanted power have now got it so they can bluster their way through the storm. After all, what’s the population going to do if they don’t get what they were promised? Take the government to court? Interesting idea, but I suspect that’s not going to work somehow.
Tim Newman (June 12, 2017 at 9:29 am) notes the houses have appreciated but there is more fundamental point.
The working-not-scrounging class know they have paid taxes. We know all that money was paid into a pyramid scheme (a ponzi scheme for US readers): lefties warn against greedy dishonest businessmen who’ll take the money and run; the same lefties buy votes with promises they do not fund, and also do not save for. What does it matter whether someone’s house has appreciated compared to the fact that what its owner paid into the pyramid scheme was spent on its current users (and on government administration, jollies, vote-buying, etc), leaving nothing but a moral obligation behind.
This is the context in which May’s idiot plan ‘looked like a good idea at the time’.
Like the slow death of free speech, these things are started by the left but then accepted by the conventional right. IIRC, the last year we paid off some national debt was Margaret Thatcher’s last year in power. (Inflation had un-paid off quite a bit of it by then.) Since 2010 there has been much talk of austerity (and if there are indeed 5000 fewer police on the streets of London then maybe there has actually been some – though I’ll bear in mind it was Corbyn who told me that). But I have not heard there has been a reduction in the debt Gordon Brown left behind him.
Labour spent like there was no tomorrow. We are living in the tomorrow Labour spent like there wasn’t. Explaining this so as to gain votes, not lose them, is not as hard as May made it look.
“Explaining this so as to gain votes, not lose them, is not as hard as May made it look.”
True, but it gets harder with every passing year. As has been pointed out in Perry Metzger’s Reagan thread, it’s 30 years since the Berlin Wall speech, and almost 40 since Britain rejected the Corbyn-esque socialism of the post-war era. (It’s been strange, in Scotland, hearing lifelong Labour supporters say they’ll lend their votes to the Tories, but it happened before, across the whole of the UK… in 1979. That’s how bad it was.)
Memories, it turns out, are short. We know that it’ll take decades, if not centuries, to pay this debt off, but try telling that to an 18-year-old voter to whom Gordon Brown is a vague figure from his school days. Some of Corbyn’s young supporters refuse to believe that he sympathised with the IRA, even as IRA members themselves say he did (and anyway, who were the IRA?). How do we convince them that decisions made when they were still crawling around in romper suits must affect government policy today? What about in another decade, when we’ll have voters who weren’t even born when Brown delivered his 2001 budget?
a debt which will
take millenia to pay offbe monetised as usual.Welcome to Weimar!
My gripe about the social care business is that it is a form of wealth distribution. A person who has little money and does not own property will be subsidised by people who do. If I ever found myself in such need, the authorities could take as much of my income as they like, but kindly leave my wealth alone. You spend my income and I’ll spend my wealth.
It’s a product of the system architecture, which means there’s no fixing it without changing the institutional structure. It’ll just get worse and worse until it gets to Greece and beyond, and finally crashes to anarchy, because no politician can gain power without working the bidding-for-votes-with-free-shit-from-the-gubmint system.
As long as elected governments can both legislate AND tax to pay for the idiot bribery-cycle, there’s no way out. That function needs to be split into two entirely separate, and separately elected, legislatures: one to pass laws and one to raise taxes; so that nobody can climb on the stump and yell “Vote for me, and there’ll be more free shit from the Gubmint for you all”, because his party, even if elected, won’t control the purse-strings. And if he’s standing for the taxing legislature, he can’t make any sort of promise about what laws will be passed, because that legislature has powers only to tax, not make laws or policy.
Separation of powers, Chapter 2.
Sam Duncan (June 12, 2017 at 1:21 am): “weird … For the first time in history, low taxes and governmental austerity (where it even exists) are seen by the general public as harmful.”
This is not so surprising; it is a relatively recent thing in history for the general public to think they have enough control that money taken by government may come their way. It is a relatively recent thing for the chattering classes to think (with more reason) that they’ll control the expenditure and get their hands on much of that money (so they encourage the public in their illusions.
In some ways yes, but even the bad trends have their weaknesses, from Labour’s PoV. Every “don’t take my house” voter knows that the immigrant who just arrived with nothing, not even a passport (because he burned it so he could pretend to be 14 instead of 34), will always be poorer than him – that “from each according to your ability (to be taxed); to each according to his need (which is greater than yours)” is going to work out badly for them. The excellent Sowell quote of Ferox can be balanced with Thatcher’s “Eventually you run out of other people’s money”. Ideas of austerity create a background where the thought “there is not enough government money for all – if some are to receive their earned dole, others must forgo their unearned handout” is one of many thoughts (including many higher thoughts) that are not as hard to sell as May made it look.
“If I ever found myself in such need, the authorities could take as much of my income as they like, but kindly leave my wealth alone.”
That mindset is entirely the problem. The whole purpose of amassing wealth while you have the capability of doing so is to provide for your own needs. Providing for yourself is the first obligation of every responsible individual. If there’s anything left over at the end of your life, that’s great; I’m happy for your kids. But that’s only secondary. Your heirs might have a hope, even an expectation, of receiving an inheritance, but certainly no guarantee of it. Every dollar of personal wealth should be consumed before the first dollar of tax money is applied to your care. Taxpayers shouldn’t be subsidizing your kids’ inheritance.
One attitude that has certainly changed in my lifetime; there was a sense of pride (or even duty) to be able to provide for one’s own and a sense of shame to have to go cap in hand to the Government for help. The sense of entitlement has completely taken over. I wonder if there is a way to reverse this.
Laird:
I agree with you 100%, provided you do not have a welfare state.
If you do have a welfare state, you will have been heavily taxed all your working life to pay for it, so that you could not afford to make your own provisions even if you wanted to. Then, when you are old, and fall ill with dementia, and are finally in need of the welfare state, the bastards decide you don’t count, and take your house and every penny you possess down to £100,000. Fair?
You and I both know that the basic premise of the welfare state is flawed, and would see it change. But while it is in place, and taxing people to pay for it, it is only common equity for the people who have paid for it to expect it to be there for them.
The dementia tax is proof enough that the welfare state does not and cannot work. A sensible government would acknowledge that fact, and attempt a proper reform of the system. Theresa May, who has no great political ideas, thought she could get away with a plan to steal peoples’ houses and still win an election. She’s even more stupid than I thought.
John K, I certainly agree with you about the failures of a welfare state. But even given that, you ask is it “fair” to expect that you pay your own way? Of course it is. The gross level of taxation has nothing to the obligation to provide for yourself. Sure, high tax rates make it more difficult to amass wealth, or even modest savings, but that doesn’t change the fact that you still need to apply whatever you do have to your own needs before looking to the taxpayers for a handout. Or, at the very least, pay back whatever benefits you have received out of your estate once you’re dead. But I cannot countenance taxpayers subsidizing your kids’ inheritance. That’s simply immoral.
Laird.
You seem to have missed my main point – the matter of redistribution of MY wealth, which (such as it is) I have acquired over my lifetime, not by inheritance, but by my work: taxed work. In effect, if I have to pay but others do not, then I am subsidising those people, and not taxpayers doing the subsidising.
The only good thing to come of all this is the increasing loathing we all feel for the state and the moochers and our increasing willingness to lie, steal and cheat to defeat them.
I did not miss your main point; I rejected it. I don’t care how much you’ve worked versus how little other have, or how much tax you’ve paid. You are responsible for yourself; no one else is. Only if you completely run out of resources do you have any sort of a “claim” on the assets of others (i.e., welfare benefits, broadly defined). You are subsidizing no one if you use your assets to take care of yourself; your assets aren’t being “redistributed” to anyone but yourself. You are, however, stealing from others if you draw on the state’s resources merely to preserve your wealth for purposes of enhancing your children’s inheritance.
OK.
Lie, steel and cheat? Dear me, no. Engage the services of a tax accountant. Nothing wrong with that.
If you’re in the USA: Either buy excellent health insurance and long-term care insurance, or start gifting your money to your kids/heirs/friends/cats very early. The look-back period is generally around five years.
If you’ve spent your working life paying heavy tax and thus buying health care for all of the non-working types while at the same time financing your own health care costs, then there’s no “theft” involved in looking at the tax/clawback regs and planning accordingly.
Laird, you pay into the NHS. Do you not expect service in return. Making use of a system forced on you and which you pay for, and perhaps paid for for many years, is in no way immoral. Do you eschew the public road system because it was paid for by taxpayers other than yourself.
Laird:
As I said, you and I are in agreement on this. The problem is, we have a Welfare State which taxes us accordingly. And the deal is that, in return for this money, you are not on your own, the welfare, which you have paid for, will be there for you when you need it.
Except that it isn’t.
We have high taxes; income tax, plus employees’ National Insurance, plus employers’ National Insurance, gets to around 45% for an average worker. So that’s almost half your wages gone to pay for, amongst other things, the Welfare State.
Then, when you are old, if you fall ill with dementia, you find that the Welfare State is not there for you. Now, you really do have to finance your own care, selling everything down to your last £100,000. But of course, because we have a Welfare State, the person who has never saved or made any provison for himself or his heirs, gets the same treatment as you, but does not have to pay for it.
The basic unfairness is clear to see. It was certainly clear to the British electorate, who gave Theresa May a good hiding. I suspect that if the Labour Party had been led by a more decent, centre left politician, they would have won. Many people, including myself, voted Conservative because the prospect of a revolutionary socialist in Number Ten was too horrible to contemplate.
What we are both agreed on, I suspect, is that the 1940s era concept of the Welfare State has run its course. What we need are politicians with the courage to admit this, and the vision to plan for a new deal (so to speak). What we lack are politicians able to do either of those things.
You work, you save, you invest, when you can no longer work you hope there will be enough put by to carry through old age. If you cannot save, if investments fail then you must look to charity.
All investments are uncertain but probably the surest is to have children: an annuity, and if life is short then the store of value passes to the next generation.
The Welfare State has been sold as contributory, a forced saving and investment; thus, not unreasonably, entitlement. But in practice it has also taken on the role of charity; thus entitlement without contribution.
Taxes rise, it becomes harder to save, and invest safe from taxation. But until now pensions and housing have been seen a safe place — the politicians would not dare…
The decline of job-for-life, low interest rates, Gordon’s tax raid, etc. have destroyed faith in pensions.
Now it looks like ‘demetia tax’, LVT, whatever are the politicians last grasp to prop up a system that is no longer sustainable.
Of course John K and Laird are both right.
It is indeed utterly immoral to expect your care bill to be paid for out of taxpayer’s money, just so you’ve got a larger estate to pass on to your kids. It is also utterly unfair to tell A to pay into a “pool” for care costs, and then to say that he isn’t entitled to draw from that pool, while, B who didn’t pay into it, may. These are both true.
This is not a paradox. If you start with a fundamentally immoral system, trying to find moral ways to operate within it will produce just such moral opposites. You could do the same with anything else that was broken at its core. Is a slave justified in murdering his master’s neighbour if needed to make good his escape? The only solution to such a problem is not to have slavery in the first place.
The mistake Jurnican, Henry, John K and others are making is to think of payments to the NHS, National Insurance, etc.*, as prepayments for some future service or benefit. They are not. They are simply taxes, however they might be denominated or whatever the method by which they are calculated. And you pay taxes solely for the privilege of living in your country. That money isn’t going into any sort of “trust fund” or segregated account; it’s being spent as fast as it comes in. Yes, you can hope that when you are in need those benefits will be available, but that is merely a hope; the government can, and will, change the rules at any time it likes. And that’s no more (or less) “immoral” than the entire taxing scheme itself.
* Of course, those are the British systems. I’m in the US, so for me it’s Social Security, Medicare, etc. Same basic things; different names.
Laird:
What you say is true. Nonetheless, the deal in the UK is that we have a Welfare State. It is funded out of tax and National Insurance, but access to it does not depend on paying in to it.
Thus, the feckless person who lives off welfare all his life gets the same care as someone who has actually paid hundreds of thouands of pounds into the system.
There’s a certain equity to that. Where it fell down in the general election was over the treatment of seniors with dementia. In their case, the Welfare State suddenly ceases to exist if you have assets over £100,000. You get the same care as the feckless person who has never worked a day, but he gets his for free, and you have to sell off everything you own down to your last £100,000. Mrs May has such a tin ear that she thought that this would come across as a good deal. The seniors who actually vote Conservative gave her a giant raspberry.
The only real solution is to admit that the whole concept of the Welfare State is flawed, and reform it, but no politician has the stones for that.
Mary Contrary nailed it, so I’d stop wasting time trying to square the circle.
Good post – a excellent quote.
The public are told that cuts-in-the-increase are “cuts”, and nearly everyone (including some libertarians) believe there has been “Austerity” over the last few years (if only….).
As for the impending fiscal crises of the Western World – no one is really opposing the unlimited government spending promises of cradle-to-grave everything. And the young and “educated” are being taught to demand even more – for example an guaranteed income for all.
The Credit Bubble financial system has kept things afloat much longer than I thought possible – but eventually it will break down. And then (ironically) the people will be led to blame the “banksters” for the failure of IMPOSSIBLE promises.