Elsewhere in The Guardian

Karl Jones tells us two things about Brexit, tariffs and imports (Letters, 8 November) in response to my own letter to you (6 November). These two are as follows: “True, charging zero tariffs on foreign goods should make them cheaper”; and “Imports alone do not generate wealth for any but the few rich importers.”

It is somewhat difficult to reconcile these two points. If you, I, or Mr Jones, pay less for the imports we desire and consume in the absence of taxation of them, then we are richer – by exactly the amount of tax that we’re not being charged on our consumption. We all do agree, at least we ought to, that a cut in the VAT rate will, considered alone, make us richer by leaving more money in our pockets with which to do other things. Tariffs are equally a tax upon our consumption. Lower that tax and we’re richer.
Tim Worstall
Senior fellow, Adam Smith Institute

Seriously, the idea that imports only benefit the firms doing the importing and not the consumers……

9 comments on “Elsewhere in The Guardian

  1. You’re in the letters page a lot recently; you ought to do an opinion piece. I’d love to see the comments…

  2. They used to use me to do exactly that, stir the nest. This editor and the last one tend not to want to do that. Not worth chasing hard either. CiF pieces (ie, not in the paper) pay £85. Fine if was easy to get their attention, discuss a piece, get it assigned. For that’s the part of this which takes the time, getting the agreement to do something. Writing a piece might be an hour and that’s a good hourly pay rate. But if you’ve got to spend half a day tracking them down…..

  3. You would be in more intelligent and morally decent company with a column in Viz Tim.

    What about Private Eye tho’. Something to counter-act their still far-too-left mindset and would get you a higher profile etc.

  4. Viz (despite not being as funny as it used to be) has made a better fist of satire than Private Eye for decades now.

  5. The Brexit debate exposes the standard lefty habit of arguing for something in one context and then decrying g that thing in another. Here ot’s reducing VAT is great but what’s the point of reducing import costs?

    On Saturday night I had just such a discussion with lefties who ultimately didn’t believe free trade was a good idea and believed passionately in “protecting jobs”. “OK then, now make a postie case for the EU, not one based on the terrible things they’ll do if we try to leave”. In return I got single market, customs union, free morent of goods etc.

  6. It’s got to be more complicated than ‘I get richer if the price of imports drops’, because if there exists a huge balance of payments deficit, the value of the pound goes down, and eventually those imports rise in price, or I get severely caned when I go on summer holiday abroad. But then what do I know? All I do know is that if the Government steals less of my money, richer or poorer I’ll be happier. Fat fucking chance …

  7. But… but… the guvvmt needs those taxes!!!! And consumption is sinful, we’ve got to make it as difficult as possible!!!!

  8. Tim was right to point out Karl’s mutually incompatible statements. Got to keep it brief to have a hope of your letter being published. However Tim’s letter still leaves Karl scratching his head about what generates wealth. Its a commonly held fallacy, that Karl seems to share, that reducing the price of imports need to be paid for one for one with an increase in exports or the stock of a country’s wealth diminishes. Well it was sort of true in the days when UK didn’t have a floating currency. But Karl knows we do have a floating currency because he pointed out the lowered xrate of the pound put down in all probability rightly to Brexit
    Really the goal has to be is to not to pooh pooh such statements steeped in common sense but to enlighten the common sense with the enlightenment or later economics.

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