Ragging on Richie

Here is Richard Murphy\’s comment on that Johann Hari book review concerning the Laffer Curve:

The New Statesman includes a brilliant article by Johann Hari called Cooking the Books. What it amounts to is a complete destruction of the Laffer curve principle, so beloved by the Right and invented by, as Hari says :

a group of men who were untrained in economics – and, as it happens, borderline-insane.

As he notes, the universally discredited Dick Cheney was one of those involved. He saw it:

presented in a simple, easily digestible form the messianic power of tax cuts.

There was just one problem. It was, of course, a complete work of fiction. Read the article. It’s well worth it.

As far as I recall it, Murphy claims t have a degree in economics. He must have missed that bit where they point out that the Laffer Curve is both obvious and trivial (for a given value of the word trivial).

A more balanced appreciation of Hari\’s piece is here, written by some godawful horrible classical liberal. One who seems to have stayed awake for that 5 minutes of an economics degre.

4 comments on “Ragging on Richie

  1. Tim you might enjoy the latest post up at younotsneaky on comparison between laffer curve and monopsony employment and the minimum wage

  2. All this stuff about the Laffer curve is very diverting but there is an impressive (and challenging) professional economics literature on optimal taxation of which this link is to a brief survey of the territory:
    http://www.urban.org/UploadedPDF/1000539.pdf

    Another, longer and less accessible survey, for the Institute of Fiscal Studies (IFS), is here:
    http://www.ifs.org.uk/fs/articles/heady_feb93.pdf

    James Mirrlees, a British economist, was awarded a Nobel laureate in 1996 for his work on optimal income taxation published in 1971. His collected papers were published last year with the title: Welfare, Incentuves and Taxation (OUP, 2006)

    Good luck.

  3. Is Richard Murphy really worth all the effort, Tim? The bloke thinks anyone who wants to retain some of their hard-earned income is right wing and refuses to debate with them. He peddles political arguments not economic ones, something that accords with his political agenda (redistribution of wealth from the creators of wealth to the indolent) is brilliant whereas anything that does not is self-evident rubbish not worthy of comment. If you stopped giving him the oxygen of comment, he might crawl back under the rock from whence he came.

    Tim adds: Well, he does in fact have a certain amount of influence. He’s got some ideas on accounting that are not obviously silly, and some other ideas which are simply howlingly insane (he seems to support the abolition of fractional reserve banking which puts him way out there with people like Lyndon La Rouche). Pointing to those insane ideas might at least get people questioning the other ones.

  4. As I pointed out in a previous comment, the Laffer Curve is simply a restatement of Rolle’s Theorem. Are we really meant to believe that Johann Hari is up to the job of disproving fundamental results in calculus?

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