Ritchie on logic

What I want to emphasise is that this opening statement can be read as if complete in itself if cut off like this:

A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company

The reality is that, in my opinion, all that then follows, including references to the benefit of members, must be seen as qualifications on how this short statement I have just extracted can be clarified to make sure it is effective in practice.

I make the point because what this says is that the corporation is not, of itself, an immoral structure, just as tax is not, as I have already argued in itself capable of such judgement until put into practice. The very clear duty of a director is to run that organisation to the best of their ability. That’s it. Nothing more, or less.

So the question to be asked is whether tax avoidance could ever in that case reflect action taken in good faith likely to promote the best interests of the company. I agree with David Quentin that this can actually be reduced to a question that does not even need involve moral language: it simply needs to be asked whether or not the act of avoiding tax is anti-social in that it imposes cost on others or not, and since it does the question is answered that such practice can never in that case be consistent with acting in good faith.

Fascinating really, isn’t it? That leap from “good faith” to “imposing a cost on others”. If running a company in good faith did in fact mean not imposing a cost upon others then it would be pretty difficult to charge the customers for the products of the firm really. Because while getting them to pay for the goods and services might be a cost they think worth paying it’s most definitely a cost, isn’t it? Meaning that charging for goods and services is something not being done in good faith and is therefore something a company shouldn’t do.

Just fascinating.

39 thoughts on “Ritchie on logic”

  1. Tim

    Do try and keep up. Elsewhere in that blog the Murph states that there is nothing more to debate. He has spoken and his word is final. And here you are trying to debate the issue. It just won’t do.

  2. He seems to be (intentionally) confused as to whom the directors are ultimately responsible.

    Picture the AGM, where it’s announced that the company has met all of it’s social responsibilities, but unfortunately has gone skint. Do the beneficiaries of the company’s social largesse (the general public) compensate the directors for doing the right thing by the public, but not the shareholders ?

    Clown

  3. I remember when it was discovered that the trade union Unite was paying bugger all tax on investment income because it was off-setting its costs against that income rather than against its subscriptions that Murphy defended it on the grounds that they were just being compliant. Apparently, Unite has no social responsibility to the wider community.

  4. Also, of course, he’s (as ever) talking about avoidance, not evasion. So he’s saying that paying your correct legal tax bill when you could voluntarily pay more imposes a cost on others and is therefore immoral (for all that he claims to be avoiding moral language — is he fuck). Does he really not see that exactly the same reasoning applies to any entity that ever pays less than 100% tax?

  5. “The very clear duty of a director is to run that organisation to the best of their ability. That’s it. Nothing more, or less.”

    Which is exactly what Paul Flowers did!

  6. ‘it simply needs to be asked whether or not the act of avoiding tax is anti-social in that it imposes cost on others or not, and since it does the question is answered that such practice can never in that case be consistent with acting in good faith’

    If you substitute ‘tax avoidance’ with ‘tax cost’, Unite is an interesting example. Given that their ultimate aim is to extract ,from the public purse, and on behalf of its members, the highest unit labour cost for the minimum number of hours worked, surely its aims are, by Murph’s definition, equally anti-social ?

  7. “…the corporation is not, of itself, an immoral structure” sounds like a defence of brothels or the KGB.

    He seems to be hypothecating a notional amount of tax that he deems should be paid to some courageous expenditure. Hence any shortfall is a cost to the theoretical recipient of this money, as it might be a statist ‘thinker’ in search of a sinecure.

  8. “He seems to be hypothecating a notional amount of tax that he deems should be paid to some courageous expenditure. Hence any shortfall is a cost to the theoretical recipient of this money, as it might be a statist ‘thinker’ in search of a sinecure.”

    This was the basis of much of his absurd pie chart of tax “spending”.

  9. “… whether or not the act of avoiding tax is anti-social in that it imposes cost on others or not, and since it does …”

    What Dickie appears to be talking about is other taxpayers. He seems to ignore the fact that the cost is imposed on taxpayers by the government, and that the cost can be reduced by reducing government spending. Tax avoiders are merely the most able at shrugging off the demands of the Treasury.

    His stance on tax avoidance will always return to a moral one of paying more than what the law requires, no matter what mental gymnastics and willful blindness he applies.

  10. “This was the basis of much of his absurd pie chart of tax “spending”.

    And is entirely contrary to his regular contentions that there’s no reason why the state shouldn’t borrow more.

    Although he seems to stop short of saying it (either because he doesn’t understand, or realises that it doesn’t help his ‘social justice’ cause) he suggests he sees that tax is just how you get rid of excess money in the system. That’s a reasonable enough view of things – but you don’t then get to say that tax foregone is a cost to anyone.

  11. I am unsure whether Richie’s misuse of the English language is deliberate of a sad reflection of the state of education.

    The sentence he quotes simply does not mean what he says it does. The phrase “in good faith” relates not to the director’s behaviour, but their consideration (or belief) about their behaviour (one can see how such nuance might be missed by some…). Contrary to what is stated, the sentence requires a director to genuinely believe they are acting in a way most likely to promote the success of the company.

    It is quite possible a director would believe (or consider in all good faith) reducing the company’s tax liability served to promote its success. In fact, one might be surprised if she/he did not believe such.

    Slightly more pedantic, but neither does the phrase quoted mean a director must “run that organisation to the best of their ability”. As Ironman points out, that may be what Paul Flowers did, but it is difficult to see how he was acting in the way even he believed would be most likely to promote the success of the company. The quoted sentence does not relate to the amount of effort being expended but how such effort is directed.

  12. Fiends Reunited tells us he was educated at Northgate Grammar School for Boys. With typical modesty he tells us

    “Became a chartered accountant.

    Set up my own firm in 1985; my partners and I sold it in 2000 and now work from home.

    Also involved over the years as a director in 9 companies, including Trivial Pursuits and 2 dot.coms (both still going), a theatre school, environmental monitoring and others.

    Now working mainly as a company doctor, and writing for the Observer and others. I have written the odd book too.

    I am also heavily involved in campaigning for pension and tax reform from a left wing perspective.

    Lived in London for 22 years but moved to Ely in 2001. Married (2nd time) 1999 – 2 young sons.”

  13. Good grief. Having already parsed the section of the Companies Act to suit his own ends he then doesn’t even construe the bit he’s left with correctly. It’s not a duty to act in good faith. It’s a duty to act in the interests of members and in considering what those interests are do so in good faith. It’s a duty to members, not the world at large (that is framed by other laws).

  14. > That leap from “good faith” to “imposing a cost on others”.

    It’s not very clear what he’s saying. But I took it to be the other way around: ‘X imposes a cost on others, therefore X is not acting in good faith’. More fully: ‘(1) X avoids tax, (2) avoiding tax is imposing a cost on others, (3) imposing a cost on others is anti-social, (4) being anti-social is not acting in good faith, therefore (5) X’s avoidance of taxes is not acting in good faith’.

    As Tim has said, (3) is false. Imposing a cost on others might sometimes be anti-social, but in many cases it is not . (4) is also false (as far as we can tell, given its vagueness). And (2) is dubious — it depends on what is meant.

    Furthermore, the original issue concerned whether the director of the company was acting in good faith when he or she attempted to promote the success of the company, which simply refers to whether the director had a sincere and honest intentions and beliefs that the course of action taken was the best. It doesn’t refer to whether the director was acting in good faith in some more general, and very vague, moral sense. Ritchie has simply tried to use some blather to change the subject.

  15. Glendorran:
    The gall bladder op is minor (I know: I have had it and you are out in no time) but whilst I have some sympathy for the condition (I wouldn’t wish the acute pancreatitis which preceded mine on anyone, including him) I think he is malign rather than merely a buffoon, that his form of leftist stupidity has been over-indulged and that it is time for that to change. Don’t forget that he has charitable funding.

  16. Bloke in Costa Rica

    Any time I see Murphy trying to formulate a syllogism I’m reminded of Johnson’s crack about a dog walking on its hind legs.

  17. I wonder if he will be quite so enthusiastic about the NHS after a stay in hospital? He wouldn’t be the first person I’ve seen have their eyes opened whilst having something else operated on.

  18. Hey, won’t he be under NHS employed doctors and nurses for his op? Rather than the privately employed doctors and nurses you tend to find outside of hospital?

  19. I think you’ll find that, even if they end up pulling his gall bladder out through his eye sockets using a rusty old pair of pliers, and then leave him to recover, smeared in his own faeces, in a stationary cupboard, his public pronouncement on the NHS will be nothing but effusive.

    His paymasters wouldn’t have it any other way.

    Which would be ironic, given that it’s usually everyone else who has to suffer so Unite can justify his pay cheques.

  20. bloke (not) in spain

    There’s a lot of talk about Murphy’s “logic” here, but aren’t you looking at it from the wrong direction.
    He starts from the position he wishes to attain, then constructs logic strings backwards, searching for justifications, reinforce his position. & discarding any paths that don’t. He uses much the same formula for most of his ideas.& it’s the reason so many of them conflict.
    Not saying he’s unique in this.
    It’s pretty well the standard method of reasoning for the majority of people. It’s what religions are based on.

  21. Picture the scene:

    The Big Dick: “Did you renew the licence for the car?”
    Underling: “Yes sir Richard, it was five grand”
    The Big Dick: “What the f***?!!”
    Underling:”Well, I hate the big 4×4 you dirve which is murdering Gaea, so I paid over a bit extra.”

    I’ll leave you to write the next line…

  22. The Big Dick: Although I own a big 4×4 it is in fact not a big 4×4 as for reasons I have explained on many occasions before and do not need to repeat here it has been a small electric powered ecomobil all along and so I do not have to pay VED.

    You are clearly a neo-liberal troll

  23. GlenDorran

    The concerning thing is that ‘absurd pie chart’ has been widely circulated amongst people who still have the right to vote. I have mentioned on a couple of links here that it needs some pretty sharp debunking – over to you, TW…. (I note Christie Malry has already penned an excellent piece at FCA blog)

  24. Given the amount of gall he has I’m not surprised about his condition.

    I expect to hear soon that he’s had an operation on his bollocks soon.

    I wish him nothing but ill. He wants to materially damage the lives of my children.

    Jack C fuck off.

  25. Interested,
    I was quoting the Great Man, rather obviously I thought.

    As he will no longer tolerate debate on his own site, I thought I might impersonate him here.

    I think I’ve covered all the points he would make.

  26. @Max, being a pedant I like Murphy’s final (as yet) reply, for singular reasons:

    “Sorry, but you’re wasting my time and other reader’s too with silly neoliberal games that are recognisable a mile off”

  27. @ Richard
    His wife is a GP, so he will get the five-star treatment that us oiks would have to pay through the nose for if we went private. In the Courageous State the nomenklatura don’t have to join the queue to buy bread.

  28. Max

    Even ‘Dr. wirmussen’ might have to take second place to that. Even taking into account his total lack of historical knowledge, his lack of awareness is astounding…

  29. “Imposing a cost on others”
    I would say that Aldi & Lidl have imposed a pretty high cost on Tesco!
    In much the same way as the iOS / Android led smartphone explosion cost Nokia a huge amount.

    It should not be allowed!

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