The report is, from the outset, fundamentally flawed as a result.
Why ass this mistake mean made? Simply because this whole review is built on the bankrupt model of neoclassical economics.
You know, the voluminous review of the economics and politics of taxation undertaken by a Nobel Laureate in economics?
During his time at Oxford he published papers on economic models for which he would eventually be awarded his Nobel Prize. They centered around situations in which economic information is asymmetrical or incomplete, determining the extent to which they should affect the optimal rate of saving in an economy. Among other results, they demonstrated the principles of \”moral hazard\” and \”optimal income taxation\” discussed in the books of William Vickrey. The methodology has since become the standard in the field.
Vickrey and Mirrlees shared the 1996 Nobel Prize for Economics \”for their fundamental contributions to the economic theory of incentives under asymmetric information\”.
Someone who actually got his Nobel for considering, in part, optimal taxation under conditions of asymmetric information?
You know, someone who actually knows his subject as opposed to the opinions of a retired accountant from Wandsworth?
Oh, and Ritchie doesn\’t actually mean \”neo-classical economics\” although he\’s too ignorant of the subject to understand that. He means \”neo-liberal economics\”: you know, the modern, market based, Hayek, Mill and Smith were right sort of stuff that he doesn\’t like. Rather than ne0-classical economics which is the marginal revolution, Marshall and all that, price theory etc.
And they’re wrong. Markets are utterly dependent on governments for their survival …(….)…. and by pricing externalities which the market is unable to do.
Marshall, neo-classical economics, is where we first find externalities discussed and the importance of government in correcting the market failure (or their absence from market incentives, to taste).
Lordy but the man can be a twat at times.