How did we end up with a commentariat this damn stupid?

Anne Perkins in The Guardian:

In fact, Piketty says, even what he calls the “meritocratic extremists” like bankers with their bonus bonanzas are never going to be as rich as those whose wealth is founded on vastly valuable property rights such as Britain’s super-rich, old aristocratic families like the Cadogans and the Westminsters.

OK, let’s take Piketty’s ideas as being true, just for the sake of this argument. Those that have wealth become ever wealthier simply because the returns to wealth are greater than the general growth rate in the economy. And this means that buying and selling things ain’t ever going to get you to that wealthy peak. All you need is to have inherited some great asset, like a few hundred acres of central London that your family has neither bought nor sold for some three or four centuries, and you’ll be richer than any of the great entrepreneurs, any of those who try to come up through trade or anything like that.

So, what’s the proffered solution to this?

Piketty’s analysis is fascinating and persuasive, but it is hard to see how to make it politically useful when the humblest effort to raise even the smallest levy on financial transactions,

What? The analysis is that doing transactions isn’t what creates the wealth. Have and hold without transactions is what does. So how does taxing the transactions that the greatly wealthy don’t do and don’t have to do deal with the problem of the greatly wealthy?

Seriously what sins have we as a nation committed to end up with a commentariat this damn stupid?

37 thoughts on “How did we end up with a commentariat this damn stupid?”

  1. They have always been this stupid. We plebs just didn’t know it, and even if we did, could only moan about it in pubs.

    Now, thanks to the Internet, people like your good self can point this out, and other people can read your expose of this nonsense.

    See also climate change, GCHQ, Leveson, Hillsborough, Chantler etc. etc.

    No wonder dead tree media hates the Internet.

  2. What’s interesting about the Westminsters and Cadogans is how they’ve managed to hold on to their wealth through the centuries. They are the exception rather than the rule.

    Anyone watching the excellent BBC4 programme on gardens at Stowe last night would have seen how the fabulously wealthy second Duke of Buckingham managed to bankrupt his family with twenty years of high living in the mid C19th.

    And there’s a reason why we have so many beautiful National Trust properties, country house hotels, prep schools and management training centres all over the UK – because the aristocracy who built them could no longer afford to live in them.

  3. It’s not really our sin. At least, it is one of omission rather than commission.

    Summary executions to prevent “the long march through the institutions”, while fun, would not really have been justifiable in legal or libertarian terms.

  4. They’re not stupid. Its all out of the Ellsworth Toohey playbook. Any old bollocks to achieve the unstated aim.

  5. It’s the results of Education, Education, Education in full flower. A dumbed down education system leading to a dumbed down commentariat.

  6. Wait a minute! The sentence by Anne Perkins you quote finishes “or on hugely inflated property values” , As you are on record as agreeing with Matt Yglesias that most of Piketty’s proposals for taxing wealth can be achieved by “stiff land taxes” (and action on intellectual property rights) , you should be approving of Perkins on what matters and discounting her weird comments about taxes on financial flows which are beside the point.

  7. Jim wins here.

    The whole point for the Courageous State (that term does rather sum it all up perfectly doesn’t it) is to tax tax tax. And then the State gets to do all the spending. So, whatever happens – or doesn’t really happen – just proves the point. If it rains or if it shines, they both prove, PROVE, the same point.

    Is Piketty correct? Will Capital returns be greater than economic growth the all of the next century? Doesn’t matter. If yes: tax; if no: tax.

  8. DBC Reed

    It would be a very strange critique of an article that chose to discount its central argument.

    However, for once you might find yourself in broad agremeent with other comments on this blog. The LVT would indeed be a very good thing, whether we accept or reject Piketty’s analysis.

  9. Even the LHTD, yesterday, managed to grasp the idea that taxing transactions might not be the best way to deal with inequality.

  10. “what sins have we as a nation committed to end up with a commentariat this damn stupid?”

    Interesting question. Answer’s probably very few. Last circulation figure Google shows for the Graun is 189k. So if buying the rag is a sin, it’s not one widely indulged in.

  11. At least Anne Perkins understands half the argument. I’ve met countless people on the left who are all in favour of taxing high incomes (particularly in the financial services sector, of which they know nothing); but won’t countenance even modest wealth taxes.

  12. @Soarer, it’s also because of the internet that we get to read the output of these stupid people. Prior to that they had no voice. The internet is a benefit…. and a curse.

  13. “it’s also because of the internet that we get to read the output of these stupid people.
    Possibly analogous to Victorian insane asylums. One might wish to visit Bedlam to laugh at the nutters but there’s still a marked distinction between the general public & the inmates.

  14. We get it because for at least twenty years they have ruthlessly policed their own thought and speech into a smaller and smaller ‘permitted space’. People who engage in narrow groupthink and react to alternative ideas like a priest waving a cross at Dracula aren’t going to learn a lot, or want to.

  15. The Thought Gang

    I knew, JUST KNEW, that the maniac’s idea about Corporation Tax really being a transaction tax would gain some traction. FFS!!!!!!!

    In that everything is an aggregate of indivudal transactions then, yes. In that case though we may as well describe P&L accounts as transaction accounts.

    CT is in Law,in concept and as a practical exercise a profits-based ACCOUNTNG measure. Ritchie has not made any discovery as a result of reading the KPMG international corporate taxes handbook or whatever it is he’s got his hands on. There is no new way of looking at these taxes, no new paradigm.

    Richard Murphy is to tax and accounting what Pol Pot was to agriculture.

  16. @ Ironman

    Yes indeed indeed and yet, which is my point, he did appear (after it was pointed out to him) to grasp that transaction taxes don’t tackle wealth inequality.

    So however awful he may be, Anne Perkins seems to be worse.

  17. “what sins have we as a nation committed to end up with a commentariat this damn stupid?” Voted Labour too often.

  18. And how do you treat as part of a “transaction ” overheads like rents, finance, wages, capital investment and all the rest?

  19. TTG

    Try reading him this morning. He’s emboldened (or been too liberal with the Morphine) and so is quite convinced he’s found a new way of using corporate taxes to tackle all the world’s problems.

    For evidence, take this shite:

    “The reality is that when corporation tax was introduced I think it was, as the law describes, intended to be a tax on profits. The fact is that this is no longer the case…”

    This is just wrong, plain and simple.

    He also, having not published my comment in which I reminded him of the concept of SOURCE, had the temerity to use the term in this morning’s post. I’ll refer HIM to Section 5 of his comments policy!!!

  20. I am being very thick but surely Piketty’s scenario is self-limiting? if the return on capital is reinvested to add to the capital stock at a faster rate of growth than the rate of underlying growth then, unless profit share is supposed to increase indefinitely, the return on capital will fall.
    What am I missing?

  21. Bloke with a Boat

    The new superstar French economist Thomas Piketty

    Perhaps that should be written as:

    “A French economist has written something we lefties like so we have elevated him to superstar” and the sub text being “and will quote him as often as we like no matter what anyone else says”

  22. cjcjc

    You’re not missing much really. I suppose he’s saying that Capital is stealing labour’s fair share and will continue to do so, the usual Marxist stuff.

    And yet it seems, from an OECD report that Ritchie seized upon earlier this week, that labour’s share is being stolen by the Courageous State in the form of the ‘burden of taxes’ (he said it) rather than capital. And another paper, as highlighted by Tim at Forbes, showed that the being grabbed by Capital is actually being grabbed by pension funds. This of course is actually labour’s return on its deferred income. So…

  23. @ Ironman

    “Try reading him this morning.”

    No can do. Reading on consecutive days is against doctors orders.

  24. Trying to divine the destination of a loon like Murphy from his initial ramblings is a futile exercise. However, he may want to turn corporation tax (and other direct taxes that are assessed on a net-of costs basis) into a transactions tax of some sort. He also wants separate tax accounts to be prepared as well as financial accounts. No prizes for guessing who might prescribe the standard form of these tax accounts (or indeed make charges to approve them). Christ on a fvcking pile of dung in Downham Market.

  25. And precisely how is preparing ‘tax accounts’ going to be any different or provide any “opportunites to design a better…” than the present requirements for companies give now?

    Clue to the answer: it isn’t, he’s a bullshitter.

  26. Part of me thinks his evident short temper might be the death of him, even following the removal of the Gallstones. The interaction with Andrew Jackson (who I know appears here under a different moniker in line with the TRUK ‘comments policy’) paints him in as embarrassing a light as I have ever seen:

    ‘Oh well,that proves it – the aka says it so you must be right
    As fatuous arguments for defending the status quo go that takes dome beating’

    ‘These terms very clearly do not have their normal meaning
    They are defined in terms of Art 10 – which says they are transactionally based
    I am really bored explaining the glaringly obvious to you’
    ‘But since Worstall is wrong with rated to almost all economic interpretation why listen to him on this one?’

    ‘No, only pedants think the Fair in Fair Tax Mark means that
    No one else is confused, at all’
    ‘I think the argument is trite
    I don’t engage with pedantry
    I have better things to do’

    Really, the fact that this guy is seriously called an economic authority by ‘influential’ people would suggest an immediate answer to Tim’s question…..

  27. “At the other end of the pay scale, low earners are, obviously, getting relatively poorer. But they have also been getting absolutely poorer, or at least not richer,”

    I was just discussing with our cleaner yesterday, how we have so much more these days than we did when we grew up. She was telling me they have four TVs in her house (counting the big screen in the movie room).

    MrsBud and I both grew up in council houses. MrsBud’s family never owned a car, we got our first (a Morris Traveller) when I was 9 (same year we got our first black and white TV). We used to wash and wipe as chores, not load or empty the dishwasher. We had a coal fire in the lounge and no other heating in the house. My dad had two weeks leave and we used to head to the south coast and stay in a self-catering house. We used to ‘ave to get up at twelve o’clock at night and lick road clean wit’ tongue..

    Our lives today are completely different. Even our siblings and contempories who have not been as fortunate as us have much more than they did when growing up.

    Anne Perkins says “there’s surely no coincidence that inequality is approaching levels not seen in 100 years.”

    I doubt many low earners today would swap their lives with low earners from the 1960s when inequality was so much lower.

  28. @DB
    Piketty’s point is that inequality bottomed out for thirty years including the 60’s.Before and after, capital accumulation made, and has now reverted, to making life more difficult.By saying you had affordable housing in the 60’s (since disappeared ) and a car for leisure use (since shopping at supermarkets was discouraged by Resale Price Maintenance) you are making the more-equality-then argument ,as the very rich were n’t doing much better: freezing cold houses, on which they paid Schedule A of Income Tax, abusive public schools and the one black and white telly like everybody else.Compare with the present situation where house prices are a racket, both parents have to work with long commutes and you can’t really say its better , for most people, and that’s if there is any work.

  29. I’m not disputing that there was less inequality in the 1960s than now, I just don’t think the extent of inequality is anymore relevant than relative poverty. It is entirely irrelevant to me what the richest earn or own, what matters is what I earn and own. I would not swap my life for that of my parents at comparative stages, anymore than they would swap their latter years for their former years. Their life circumstances improved significantly during the period of increasing inequality.

    With unemployment in the UK at 6.9%, the overwhelming majority have jobs, most without long commutes. Most have housing so I find it very easy to say that for most people life is better now than in the 1960s. Yes, there will be some for whom this is not true, often due to their own life choices, but I’m sure the majority prefer life in a more unequal world, but then as I’ve said above, it is not a meaningful measurement of an individuals life circumstances.

  30. In addition to DocBud’s points about stuff etc, I’d point out that in real terms service stuff like healthcare is so much better than in the 1960s. The relative value of the NHS to everyone is so much greater now than it was then, and I suspect that provision in poorer areas is better now than it was then (no idea if this is true). If this was reflected in income inequality stats, I suspect that they would look far less unequal than the nominal income numbers suggest. (This isnt to suggest that there isnt plenty of evidence to suggest that the middle classes make more use of the NHS)

  31. @Van_Patten

    He really does seem to be going above and beyond the last day or two. Look at this thing about Starbucks, and how saying “UK companies do not pay tax on royalties from overseas” clearly means “Global groups with a UK presence do not necessarily pay more tax overall if royalties are aid to the UK”.

    That makes three odd definitions in the last couple of days:

    “Fair” means “transparent”
    “Profits” and “revenue less costs” are entirely different things
    “UK company” means “Global group”

    I wonder if I should start a glossary on my blog 🙂

    I’m also wondering whether to start a new blog called “Point 5 of the comments policy”, to allow people to comment on areas he refuses to engage in discussions about 🙂

  32. A further recent Murphy definition is that tax “exemptions” specifically offered and intended by parliament such as the substantial shareholding exemption are now, in Murphyspeak, “loopholes”. He’ll move on to describing them as theft at some point.

    Oh, and he’s started putting up those fvcking annoying mindmaps again.

  33. He’s just following Gordon Brown on the loopholes thing – Brown expressly called the nil rate bad of corporation tax a loophole only a couple of years after he’d introduced it.

  34. Andrew (Pellinor)

    Apologies – I had forgotten your Moniker here – and neglected to read his contretemps with Tim and the excellent Noel Scoper yesterday. His rather dim ‘adherents of civil society’ seem to have rather misunderstood what a sock puppet is but I’ll let that slide.

    What I love is that the complete incoherence of his posting – the blog is akin to a stream of consciousness along the lines of a David Icke/Alex Jones. The complete lack of self-awareness or modesty would be surprising in a 20 year old student but in a 56 year old who claims to have run a business in the past it verges on the embarrassing. If it were not for Tim’s criticism, the blog would really not be worth reading nor commenting on….

  35. Why is the Comments section dominated by attacking Murphy (for a change)? I presumed from the references that the subjects were Anne Perkins and Thomas Piketty.

  36. DBC Reed

    I agree further contributions should be subject to ‘Section 5 of the comments policy’ – sorry, wrong blog…..

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