Will the Adam Smith Instituite sack a Senior Fellow for promoting the benefits of tax evasion?
Given that it’s an unpaid position I’m not even sure if I can be fired. The title could be withdrawn I suppose….
Let’s ignore the fact that Worstall has clearly not read Smith properly, second has not understood him and third is just making excuses for the fact that his reading ends in 1776. Let’s instead note what he then concludes based on this premise:
I routinely make fun of tax justice campaigners for example–insisting that people cheating on their taxes is a good idea. Tax avoidance, and yes even tax evasion, serves the public purpose by placing a limit on how much government can try to squeeze out of the rest of us.
It’s not just that Smith said nothing like that, in fact arguing for something that can reasonably be called the exact opposite; what’s really shocking is that here we have a Senior Fellow of the Adam Smith Institute promoting law breaking and I am sure that there will be no hint of him being sacked as a result.
Which tells you all we need to know about the UK’s right wing.
But only on tax, of course.
But what is truly, truly, wondrous about this is that he’s complaining about an article in which I roundly support the Modi government’s attempts to clean up tax evasion and black money.
However, there does exist a limit at which this reverses. In the crude vernacular of my native England this is known as when people are “taking the piss.” A stage which black money in India can be said to have reached.
One of those institutions which we’re finding is absolutely vital to such economic development is the general belief among the population that the game is fair. The economy is not a zero sum game, it’s positive sum. You do not have to lose so that I may gain, it is entirely possible, through simple voluntary cooperation and trade, that we both gain from the same action or transaction. But for this to be true everyone must believe that this is true. And we are finding that not everyone does believe this and that is at least one reason why some places are very much poorer than they should be.
In broader terms, everyone must believe–or a large enough portion of everyone at least–that the game is basically fair, that there are rules and those rules are obeyed by everyone. Only then, if all believe in the possibility of that positive sum economy, do we actually get that positive sum economy and thus the highest degree of opulence.
Arvind Kejriwal has claimed that this is all a fix by Modi (no, I don’t think he’s correct). My own technical view is that it’s a clever plan. But going to the root of the idea I think it’s better than just clever. An essential move in fact. Reading the comments over the past couple of days (and yes, I do read them, also welcome them, you all in aggregate know more than I do on any and every subject so please do inform me) I’ve seen that there’s a rage at the manner in which the Indian economy, specifically with this black money problem, is felt not to be fair, does not have this tolerable administration of justice. Yes, there are specific concerns about forgery of notes, terror financing, house prices and so on, but the more general point Smith avers still stands.
We’ve got to believe that the economy is roughly, tolerably, fair for it to work in producing that opulence. That’s not a belief that many have about the black money problem in India today. Thus rooting out that problem is justified. It’s not just clever it’s necessary.
Murphy choose to call for me to be fired over possibly the only article I’ve ever written which supports harsh crackdowns on tax evasion and avoidance.
It’s difficult to make these things up really, isn’t it?