Ritchie responds!

And given his well known editorial policy I\’ll repeat my comment there here:

\”Let’s be explicit about what he’s saying here: he’s explicitly condoning crime. He’s saying we should simply allow it. He says we’re better off for this criminal conduct.\”

Not quite. I\’m saying we\’re better off by ignoring rather than attempting to eradicate this last amount of crime. Something we actually do all the time: we don\’t send out detective squads to catch jaywalkers, don\’t have riot police making sure late night drinkers put the burger wrappers in the bin. We chase and prosecute crime according to the resources that have to be spent to do so and the benefits we get from having done so.

As to the maths of the example above. Say it\’s cash in hand no VAT work (which a lot of it is). Pre-cracking down on the tax evasion there\’s £10 billion of economic activity going on. Post-crackdown there\’s that £2.33 billion in revenue, yes there is. But there\’s also only £6 billion in total economic activity. Is £2.33 in tax revenue worth the loss of £4 in economic activity? Clearly possible to have different views on this but I would argue probably not.

If the numbers change, we get £2.33 in tax revenue and only a £1 reduction in activity…..or let\’s say for each £1 in revenue we get only a 30 p reduction in economic activity (which is about what the tax deadweight costs are for an economy like ours) then perhaps I would argue for the crackdown.

But not when a crackdown would make us all, in aggregate, poorer, no, probably not.

21 thoughts on “Ritchie responds!”

  1. The other way of looking at this is that maybe a law is unjust is the number of people not respecting it is very high? Or are the thoughts of the peasants not to be listened to?

    In addition, Ritchie doesn’t appreciate the difference between negative and positive rights, but then again that would probably be asking a bit too much from a socialist…

  2. I’m not expecting him to allow it, but this was the question I posted to him:

    “Out of interest, would you propose the same approach to benefits, i.e. would you support a highly aggressive approach to investigating benefit recipients, even if the cost of carrying out those investigations would be greater than any amount which could be recouped?”

  3. We do send policemen out to catch motorists doing 5 mph over the speed limit – an impossibly minor offence which attracts a punishment out of all proportion to the crime. The purpose of such draconian action is for, “les encouragement por les Autres” (Shocking French but you get my drift) This sort of thing is Ritchie’s World. Hammer the few so that urban myth gets the many to conform and pay up. BTW, I think that the value of black labour is grossly underestimated, possibly by as much as 100%

  4. Bang on Tim

    My relative has a shop in a pretty tasty part of town and accepts as do HMCR that 15% of stock walks out the door, she just prices the crime into the price.

  5. Murphy “explicitly condones” shoplifting:

    I am just saying tackle the worst crime first

    Surely you would agree?

    Why tackle shoplifting when there are bank robberies taking placecall round you?

  6. Why tackle shoplifting when there are bank robberies taking placecall round you?

    Playing Devil’s disciple:

    Because the shoplifters get braver and turn into bank robbers when they get older.

  7. They should coin some kind of phrase to make this kind of thing easy to remember for geniuses like Ritchie.

    They could call it something snappy like: “The Law of diminishing returns”.

  8. PaulB,

    True – the definition of “enough” should factor in something to provide a deterrent effect on other potential evaders. Deterrence increases the correct level of effort, but it still doesn’t take it beyond the level at which we all get poorer.

  9. “I’m saying we’re better off by ignoring rather than attempting to eradicate this last amount of crime.”

    It’s interesting – in the context of tax, ignorant lefties like Richie fail to get this obvious point; in the context of most other crimes, it’s ignorant right-wingers who fail to get it.

    “We do send policemen out to catch motorists doing 5 mph over the speed limit”

    No we don’t, we use next-to-no-cost cameras to catch them. Non-camera-based traffic policing has almost stopped (except for keeping an eye out for drunks), with a corresponding and predictable rise in levels of subjectively bad driving that don’t involve speeding, jumping lights or boozing.

  10. without doubt the most astonishing thing in this blog is Ritches response to comment number 7 from Natalie Solent in which she poses the question of whether a similar approach should be taken to benefit fraud. His response includes:

    “But on the other hand you allocate resources to have biggest impact where tax fraud is 70 times benefit fraud”

    Which I thought was exactly Tim’s point. or maybe I am just a bit dense.

  11. You’ve obviously touched a nerve, Tim. He let your comment stand – so he could reply on his blog where his followers would see it, rather than on your blog where they won’t.

  12. Murphy says tax evasion is more important than murder:

    And if we fight tax crime – which is the biggest crime by far in the UK now

    Blimey, it’s easy this misconstruing lark.

  13. Frances Coppola, actually I always assume that I am the dumbest person in the room. That almost always guarantees that I learn something.

    Its when you think you are the smartest person in the room that you usually end up in trouble. It usually leads to hubris and a sense of infallibility, sound like anyone we know?

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