Memo to Dissembling Dan and his rich chums

Today in the Torygraph, Dan Hannan has written some pure drivel about #OccupyLSX. Apparently he went down to St Pauls Cathedral to have a “chat” with the camp and to try and convince them that he is right and they were wrong (he’d tell you otherwise). Today he’s produced what he’s called his “Memo to the Occupy protesters: here are ten things we evil capitalists really think”.  Here’s what he says.

1. Free-marketeers resent the bank bailouts. This might seem obvious: we are, after all, opposed to state subsidies and nationalisations. Yet it often surprises commentators, who mistake our support for open competition and free trade for a belief in plutocracy. There is a world of difference between being pro-market and being pro-business. Sometimes, the two positions happen to coincide; often they don’t.

Well, that may be the case but it’s your version of capitalism that’s destroying us. By the way, there is no such thing as free trade.

2. What has happened since 2008 is not capitalism. In a capitalist system, bad banks would have been allowed to fail, their profitable operations bought by more efficient competitors. Shareholders, bondholders and some depositors would have lost money, but taxpayers would not have contributed a penny (see here).

Wrong, Dan, it is capitalism. You certainly can’t describe it as ‘socialism’.

 3. If you want the rich to pay more, create a flatter and simpler tax system. This is partly a question of closing loopholes (mansions put in company names to avoid stamp duty, capital gains tax exemption for non-doms etc). Mainly, though, it is a question of bringing the tax rate down to a level where evasion becomes pointless. As Art Laffer keeps telling anyone who’ll listen, it works every time. Between 1980 and 2007, the US cut taxes at all income levels. Result? The top one per cent went from paying 19.5 per cent of all taxes to 40 per cent. In Britain, since the top rate of income tax was lowered to 40 per cent in 1988, the share of income tax collected from the wealthiest percentile has risen from 14 to 27 per cent.

Simpler tax system? Yes. Progressive tax system? Yes. Flat tax? No, they only benefit the rich. The Poll Tax was a flat tax. Those on lower incomes had to pay the same amount of tax as those people drawing down 6 figure salaries. This is dishonesty but then, this is what I have come to expect from Dissembling Dan. Another thing that Dan doesn’t mention about Art Laffer and Reaganomics is that millions of Americans lost their jobs and many more suffered as a result of the new tax system. Far from reducing overall debt, Reagan actually managed to create more debt. As for “closing loopholes”, the Tories will make the right noises but will fail to act. They don’t want to bite the hand that feeds them.

4. Those of us who believe in small government are not motivated by the desire to make the rich richer. We’re really not. We are, in most cases, nowhere near having to pay top rate tax ourselves; our most eloquent champions over the years have been modestly-paid academics. We believe that economic freedom will enrich the country as a whole. Yes, the wealthy might become wealthier still, but we don’t see that as an argument against raising living standards for the majority.

The motivation behind the movement to create a “smaller” government is to protect the interests of capital, thereby making the rich richer. Night watchman governments will exist only to rubber stamp the diktats of corporate interests and to use force against those who act against those interests. Just have a look at Chile, then magnify that by 2.  By the way, Dan’s rich.

5. We are not against equality. We generally recognise the benefits in Scandinavian-style homogeneity: crime tends to be lower, people are less stressed etc. Our objection is not that egalitarianism is undesirable in itself, but that the policies required to enforce in involve a disproportionate loss of liberty and prosperity.

This is contradictory. Here, Dan says that he is not “against equality” but then ends by saying that egalitarianism will result in a ” disproportionate loss of liberty and prosperity”. What he doesn’t say is that he’s worried that his class – the ruling class – is scared of losing its privileges; the privileges that it assumed for itself as a result of exploiting others who are less privileged.

6. Nor, by the way, does state intervention seem to be an effective way to promote equality. On the most elemental indicators – height, calorie intake, infant mortality, literacy, longevity – Britain has been becoming a steadily more equal society since the calamity of 1066. It’s true that, around half a century ago, this approximation halted and, on some measures, went into reverse. There are competing theories as to why, but one thing is undeniable: the recent widening of the wealth gap has taken place at a time when the state controls a far greater share of national wealth than ever before.

Here, Dissembling Dan seems a bit confused. He’s mistaken his hat stand for a hat. Comparing the present day to 1066 is like comparing apples with oranges. When he says, “Britain has been becoming a steadily more equal society since the calamity of 1066″, I wouldn’t expect to be struggling under the same brutal feudal system that the Normans imposed on the country but, at the same time, the last vestiges of feudalism remain – particularly with regards to property and common ownership of the land. He could have easily said that “Britain has been becoming a steadily more equal society since 43” or since the so-called “Glorious Revolution”. Utter nonsense.

7. Let’s tackle the idea that being on the Left means being on the side of ordinary people, while being on the Right means defending privileged elites. It’s hard to think of a single tax, or a single regulation, that doesn’t end up privileging some vested interest at the expense of the general population. The reason governments keep growing is because of what economists call ‘dispersed costs and concentrated gains’: people are generally more aware the benefits we receive than of the taxes they pay

In this paragraph, he tries to deflect attention away from the way the right (the Tories) protect their interests through the use of legislative mechanisms. Not content with hammering the low and medium waged by demanding that they work more hours for less money, the Right also attacks their culture. There are many examples of this: The Six Acts, The Licensing Act (1737), The Criminal Justice and Public Order Act. Since the Tories came to power in 2010, they have moved swiftly to carve up the rest of the welfare state (in spite of having no mandate to do so). Top of their list is the NHS, an institution that is despised by our Dissembler-in-Chief and which they want to privatize. Remember this?

8. Capitalism, with all its imperfections, is the fairest scheme yet tried. In a system based on property rights and free contract, people succeed by providing an honest service to others. Bill Gates became rich by enriching hundreds of millions of us: I am typing these words using one of his programmes. He gained from the exchange (adding fractionally to his net worth), and so did I (adding to my convenience). In a state-run system, by contrast, third parties get to hand out the goodies.

This has come straight from Ayn Rand’s dead mouth. She said that capitalism was the “only moral system”. When Dan says that capitalism (or rather his variety of capitalism) is “the fairest scheme yet tried”, he does not mention other “schemes”. Doubtless, he has in mind the economic system of the USSR, which was not socialism at all but a bureaucratic form of capitalism. Furthermore, Bill Gates has not “enriched” me or anyone else. That’s bullshit. He enriched himself and then turned into a present-day Victorian philanthropist. Was it a sense of guilt on Gates’s part? Maybe. If it was guilt then some of this nation’s rich could do with a dose of that guilt and start paying higher taxes.

9. Talking of fairness, let’s remember that the word doesn’t belong to any faction. How about parity between public and private sector pay? How about being fair to our children, whom we have freighted with a debt unprecedented in peacetime? How about being fair to the boy who leaves school at 16 and starts paying taxes to subsidise the one who goes to university? How about being fair to the unemployed, whom firms cannot afford to hire because of the social protection enjoyed by existing employees?

What on earth is he talking about? Fairness “doesn’t belong to any faction”… what does that mean? Nothing. Here it would appear that he was running out of ideas to fill up his list of ten. These examples of ‘unfairness’ are nothing more than diversions. Riding in the slipstream of these thoughts are education vouchers and a two-tier health service.

10. Let’s not forget ethics, either. There is virtue in deciding to do the right thing, but there is no virtue in being compelled. Choosing to give your money to charity is meritorious; paying tax is morally neutral (seehere). Evidence suggests that, as taxes rise, and the state squeezes out civic society, people give less to good causes.

More Randian drivel. The subtext here is that charities won’t be able to do good works if we have a more egalitarian economic system.

Well, there you go, comrades. I don’t expect the tents outside St Paul’s to fold overnight. But perhaps we might at least engage honestly on some of these issues rather than talking past each other. ¡Hasta la victoria siempre!

I’m not your comrade and you have signally failed to engage honestly.

Hannan would claim that the occupiers don’t have any ideas or that they don’t have an argument. What Hannan isn’t going to do is listen and take on board ideas, especially if those ideas don’t intersect with his barmy brand of  neoliberalism. For him, a Randian world of unfettered capitalism and shrunken states is the path to ‘freedom’.  Yet, history shows us that when capitalism is unregulated it leads authoritarianism because the state acts only to protect the interests of the capitalists, many of whom enjoy exceptional privileges under the iron rule of the caudillo.

Dissembling Dan’s preferred version of capitalism has already been imposed on the people of  Chile and now his government want to complete the neoliberal project that was started under Thatcher.

Far from having no ideas, the Occupy movement has shown that it has more ideas than our current government (and Dan Hannan), who want more of the same.

Those who don’t learn from history are doomed to repeat it

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Filed under Conservative Party, economic illiteracy, Economics, Government & politics, laissez faire capitalism, Late capitalism, neoliberalism, Spiv capitalism

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