Respect MP assaulted

George Galloway has been an MP almost continuously since 1987.  Originally a Labour MP, he is currently the only MP for the Respect Party.  It is reported that he has been assaulted in public by a man who shouted something about the holocaust.

Galloway has long been known to be critical of Israel, and he has recently taken his views one step further, calling for a boycott of anything connected with Israel, as this video demonstrates.

I do not condone the assault on George Galloway, but it is fair to point out that he has never spoken out against acts of violence where the victims were supporters of the British National Party or the English Defence League.

It is also fair to point out that Galloway owes his current tenure in parliament to the large Muslim community in his Bradford West constituency.  So far as I am aware, he has never admitted that Islam is founded upon a book which says what The Koran says.

Perhaps he would like to condemn all of the belligerent passages in The Koran.  If he will not, then he should reflect that his cowardice on this issue is not entirely unconnected with the belligerent attitude of the man who attacked him.

Update: Mr Galloway has since described his attacker as a thug from an extreme right-wing group.  I am not sure what his evidence is for this, other than that as a communist he possibly regards anyone who dislikes him as extreme right-wing.

He also wants police protection in future, although I wonder if he is really any more deserving of police protection than anyone else who has ever been attacked in the street.  For example, I wonder if he thinks that the thousands of victims of Muslim paedophile gangs should enjoy police protection.

The outdated concept of treason

What is treason?  Merriam-Webster online dictionary defines it as: the offense of attempting by overt acts to overthrow the government of the state to which the offender owes allegiance or to kill or personally injure the sovereign or the sovereign's family. 

Here are three historical examples of alleged treason.


William Wallace was executed for treason in 1305 on the orders of the King of England.  Wallace argued that as a Scotsman he owed no allegiance to the King of England, and so could not be guilty of treason, but he was convicted regardless.

Michel Ney was executed for treason against France in 1815, even though he pointed out that he had fought a hundred battles for France and not one against her.

John Amery was executed for treason against the United Kingdom in 1945.  He pleaded guilty at his trial, and the reason for his guilty plea remains a mystery.  Nevertheless he had never attacked his own country, and neither had he sought to do so.

In short, the above cases are arguably not genuine examples of treason, but rather of victimisation for political advantage.

As I write, the major preoccupation of the national press is the ongoing crisis in Iraq.  At least one newspaper is urging military action.  I feel compelled to comment on an essay by the evil Conservative MP David Davis in which he remarks:

Imagine that in my youth during the Cold War, I had gone off to join the Soviet Army with the intent of taking action against NATO, or that my father had gone to join the Nazis in the Second World War. Those actions would quite properly have been viewed as treason.

It seems to me that the traditional concept of treason is essentially a form of nationalisation.  It is the nationalisation of conscience.  Suppose your country is at war, but you are convinced that your country is on the wrong side.  If you then go and fight for the other side, then you are a traitor.  The state owns your conscience.

There is also a stench of hypocrisy about the notion of treason.  During the Second World War there were instances of Germans fighting with the Allies against their own nation.  (For example, Major Sepp Gangl fought alongside the Allies at the battle of Schloss Itter.)  Surely the Allies should have rejected this assistance on the grounds that it was tantamount to treason.

If the United Kingdom were to go to war against Iraq yet again, then I would not fight on either side.  I would have a low opinion of any British citizen who took part in that war on either side, but I am not sure I would regard any of them as traitors.

Surely it is time to discard the outdated view of treason, and replace it with something meaningful.  Treason should be defined in ways such as leading the country into an illegal war, or signing a treaty which is not in the national interest.

Rather than seeking another war against Iraq, we should be seeking to address the root cause of the problem.  Consider this quote from Lord Carey:

The menacing advance of the Islamic State in Iraq should not prejudice Western people against Muslim people and the Islamic faith. 

This is wrong, and quite immoral.  The carnage in Iraq is founded on a book which says what The Koran says.  I have previously noted some of its contents.

I repeat what I have said in an earlier post, which is that no one needs to be a Muslim.

As a final point, both Davis and Carey want British citizens who fight with the armies of ISIS to be stripped of their British passports, and that is an idea worthy of consideration.  Nevertheless Davis has taken the Conservative whip in the House of Commons since 1987.  In that time he has supported the governments of Margaret Thatcher, John Major, and David Cameron.  Each of these Prime Ministers allowed Britain to be flooded with immigrants, and in the case of David Cameron the flood continues.

How many of these immigrants were screened on arrival to see if they had criminal convictions?  Or if they held belligerent views such as those found in The Koran?

Maybe David Davis should be stripped of his British passport.  Feel free to comment.

Related previous posts include:

Air strikes against Iraq are wrong
The Express comments on Islam

Divide and rule the Conservative way

This story is about two men, Tim and Tom.  In 1979, they both work in factories.  Neither one is happy with the way Britain is going under the then Labour government, and so they both vote Conservative in the general election.

Mrs Thatcher enters Downing Street, and Tim and Tom both look forward to better things ahead.  Both men see themselves as strivers, and hope that the Conservative government will be on their side.

In 1983, Mrs Thatcher wins her second term in office.  Soon afterwards, Tom is made redundant from his factory job, while Tim is promoted to a supervisory position in the factory where he works.

In 1987, Mrs Thatcher wins her third term in power, but unemployment remains high.  Tom has now been out of work for nearly four years, and is now living in social housing.  Meanwhile, Tim has taken out a mortgage and bought a house.

In 1992, the Conservative Party - now led by John Major - manages to win a fourth term in power, despite the economy having been plunged into recession.  Tom has long since started to wonder if he will ever find another job.  Although unemployment is falling, Tom is utterly disillusioned with the Conservatives, and has long since switched his vote to Labour.

Meanwhile, Tim has been promoted to management, and is thinking of taking out a larger mortgage and buying a larger house.

The Labour Party comes to power in the general election of 1997, and initially neither Tim nor Tom has any problem with them.  In 2003, Tom lands another job.  It is less well paid than his previous job, but after twenty years out of work he considers himself lucky to have landed anything at all.

Eventually the economy begins to weaken, and in 2007 Tom is once more made redundant.  He still has the striver mentality, however, and is determined that this second period of unemployment will not last anything like as long as twenty years.  Nevertheless he is still out of work at the time of the 2010 general election, and so gives up on voting.  Neither the Labour Party nor the Conservative Party want to help him find lasting employment, and he cannot see the point in voting for any other party.  By contrast, Tim has wavered in his support for the Conservatives in recent years, but is now firmly back in the habit of voting Tory.

With David Cameron now in Downing Street, Tom tries to remain optimistic about his chances of finding another job, despite being now in his fifties.  Tim has by this time paid off his mortgage, and is hoping to be offered early retirement by his employers.

Tim and Tom do not know one another, although they live in the same town.  The money that Tim pays in taxes is used by the government to fund the benefits which provide Tom with his only source of income.  In fact the money Tom receives may well be more than the sum of the taxes paid by Tim.

Tim sees himself as a striver, and he regards the long-term unemployed as parasites who just want to live in indolence at the expense of the strivers.  While this stereotype may have some basis in reality, it is nevertheless the case that Tom, like many other unemployed people, is a victim of circumstance rather than a willing parasite.  Tom has the striver mentality, but he lacks opportunities.

In a sense, Tom is in part at least the architect of his own downfall. He has previously voted in elections for both the Conservative and Labour Parties, despite their persistent refusal to implement sensible economic policies.  However he is also the victim of the complacency of people like Tim who continue to vote Conservative despite the fact that the Conservative Party, like the Labour Party, is entirely unsuited to govern the United Kingdom.

For all his faults, Tom is more realistic than Tim, and can at least see that people like himself are victims.  Tim, by contrast, cannot bring himself to realise that the fact that he has been in full employment all his life and now owns his own home has more to do with him being lucky than it has to do with him having made sensible choices.

Tim and Tom are fictitious characters, but I would be surprised if most readers of this blog do not know at least one person like Tim and at least one person like Tom.

My point in this rather long post is that the Conservative Party tends to flourish by appealing to the striver mentality in working people while at the same time tending to disregard the striver mentality in many unemployed people.

What exactly is the British way?

This is not the British way.  So says The Daily Express in a comment about the ongoing protests against Israel in the United Kingdom.

It appears that the people who protest against Israel tend to be Muslims, and they tend to be immigrants.  If the British way is so very important to The Daily Express, then maybe they would care to express support for a political party whose policies include not allowing foreigners into Britain if they do not adhere to the British way.  Maybe they would like to go further and express support for a political party whose policies include the forcible repatriation of foreigners who do not adhere to the British way.

The Daily Express has also seen fit to publish a comment by Douglas Murray of the Henry Jackson Society.  He does talk some sense, but he is wrong about not blaming Israel.  Israel is a terror state, and has never been anything else.  He is also wrong when he talks about Islamic extremism.  Quite simply, the word extremism is meaningless.

Islam is a belief system founded on a book which says what The Koran says.  I have already noted some of its content in previous posts.

I wonder how much of the content of The Koran should be regarded as the British way.  Maybe The Daily Express would like to inform us.

Related previous posts include:
MH17 and Gaza: western imperialism
Your Muslim faith - really?

Railways need better management

Someone called Oliver Wright has recently written in a national newspaper about the state of Britain's railways.  I do not know who this Oliver Wright is, although there is a television producer by that name.

Some readers may be wondering if it matters who he is, but it does sometimes help when reading a political essay to have some idea where the author is coming from.

Mr Wright slams one rail operator for its atrocious customer service, which may surprise those of us who come from a business background.  After all, businesses tend to thrive on the basis of good customer service.

You could argue that rail operators enjoy a certain immunity from customer service issues, given that they operate in a near monopoly market.  Suppose you live in Guildford and commute into central London on weekdays.  So far as I am aware, your zero option is South West Trains.  Therefore South West Trains might seem in a strong position to continue enjoying your custom.

Then again, maybe South West Trains is not your zero option.  Maybe you can afford to drive into London, or maybe you can afford to move house and live in a town served by a different rail operator.  Depending on your personal circumstances, you might even take early retirement, and give up on commuting altogether.

I have heard of employers in London being unwilling to recruit people who live in areas served by railway lines with a reputation for slow running trains.  Nevertheless, far too many of our rail operators seem to have an unsatisfactory attitude.

I have never approved of rail franchises.  They encourage a short-term mindset, and are not based on the critical factor of vertical integration.  This means that the companies which operate the franchises do not own the tracks or the signalling upon which their trains inevitably rely.

Ideally the railway tracks should be owned by whichever company runs the fastest trains on those tracks.  This is because the faster the speed at which a train travels, the greater the danger if it derails.

Many people see a return to national ownership as the solution, but British Rail was far from perfect.  In the 1950s (when it was known by the more cumbersome name of British Railways) it was still building steam locomotives, as if the future did not matter.  It used High Speed Trains on inappropriate routes.  Its record on track maintenance was hit and miss.  Most shamefully, it allowed people to die from falling out of moving trains, because it refused to admit that its external doors were not safe.

Nevertheless British Rail did enjoy the benefits of vertical integration.

Oliver Wright criticises the state-owned east coast rail service, noting that it cost him over a hundred pounds to buy an off-peak single ticket to Wakefield, travelling on a near-empty train.  Mr Wright does not specify where he was travelling from, but I have just found a weekday single railway ticket from London Kings Cross to Wakefield for £39.50, or £57 for first-class.

There are cheap tickets available.  You just have to know how to buy them.

Mr Wright suggests the John Lewis style of management for Britain's railways, whereby rail company employees are also shareholders.  One of the more highly rated comments reads:

I worked for John Lewis and I can assure you that no one on the shop floor has any say. JL is just the same as any other company, there are the workers and the top management, all this talk of the workers having a share is just a publicity stunt. As for a share in the profits - JL shop assistants are paid just above the minimum wage, the so-called bonus barely tops it up to the living wage.

The only sensible answer with the railways is that no system is guaranteed to be effective.  The government should insist on vertical integration, but otherwise should not assume that either private or state ownership will necessarily deliver a good service.

Gather all around the young ones

A man I met many years ago had a son who became a senior manager in a company at a fairly young age.  Rather than being pleased, the man urged his son to set up his own business on the basis that he would not get rich working for someone else.

This was very poor advice.  On the one hand, giving up the security of employment for the insecurity of self-employment does increase the likelihood that you will one day become rich.  On the other hand, it also increased the likelihood that you will one day become impoverished.

A man called Paul Leighton used to be self-employed, but he ended up unable to pay his mortgage.  He then found work as a finance manager in a theatre, and stole money to pay off his mortgage arrears.  I have now made the point that self-employment can be a poor career choice.  I merely observe the fact that he was eventually imprisoned.

It is reported today that record numbers of young people are about to start university.  The top-rated comment on The Daily Mail website reads:

I've just completed an apprenticeship. My friends have finished university. Some are about to embark on exciting careers. Most are struggling to find work and are claiming benefits. I can't believe in the space of three years my view on universities has changed from 'inevitable success' to feeling sorry for the veil of illusion these young people are yet to discover.

I will not rejoice at young people either starting university or graduating thereafter, but I might rejoice at them all finding work after graduating.

I was impressed by a recent item in The Daily Express about young entrepreneurs.  We should not be surprised to see young people - including teenagers - succeeding in business.  After all it is arguably the best time of life to be starting in self-employment, partly because it is the time of life when you have the least to lose.  A teenager who lives in the parental home does not have a mortgage to worry about.

I remember several years ago reading about a teenage boy who set up a successful mail order business from his bedroom.  Before long he was shifting so much stock that he had to store his merchandise in the bath.  His mother allowed that, but I wonder how many parents would be as tolerant.

In conclusion, we should perhaps encourage young people we know to look for alternatives to going to university, but at the same time we should perhaps not encourage people to become self-employed if they already enjoy the security of a regular pay cheque.

A government minister quits

Mark Simmonds has resigned as a government minister, and intends to leave parliament at the next general election.  Officially it seems that he was an under-secretary of state (the most junior rank of government minister) at the Foreign Office.  Nevertheless it is reported that he held the office of Minister for Africa, although I'm not entirely sure that such a government office is actually needed.

Mr Simmonds has complained about the cost of living in London, and says he does not earn enough to rent a family-sized property anywhere within central London.  As a result he rarely gets to see his family.  This quote is from The Telegraph website:

A spokesman for the Independent Parliamentary Standards Authority said: “Ipsa is awake to the impact on family life for MPs who have to live in two locations – in London and the constituency. That is why we provide more support to MPs with family or caring responsibilities.” 

An MP with three children like Mr Simmonds would be able to claim £27,875 a year “allowing them to rent a flat big enough to accommodate their children”, he said.

In other words it appears that Mr Simmonds is eligible for assistance with his rent of £2322 per calendar month.  I have just checked the Rightmove website, and have found four three-bedroom apartments within walking distance of the House of Commons which have a rent of lower than £2322, and I have found two more at a monthly rent of £2383.

It is also worth noting that many people who work in central London live a long way outside of Greater London, and commute long distances every day.  How many of these people can afford to rent a family-sized apartment in London?  How many of them can even afford to stay overnight in a hotel?

It is also worth noting that Mr Simmonds does not expect his family to live with him in London.  Instead he wants them to continue to live in his Lincolnshire constituency, but have the option of staying with him in London during school holidays.  In other words he wants taxpayers to provide him with a three-bedroom apartment in central London which for most of the year would be either standing empty or occupied by just one person.

Update: Mr Simmonds has now drawn criticism from two Labour MPs, as quoted here.

Related previous posts include:
An MP's fall from grace
A tale of two scumbags

Air strikes against Iraq are wrong

As I write, armed forces of the United States of America are bombing rebel positions in Iraq.  There have also been drops of supplies to refugees fleeing the rebels.

While this is being portrayed in the press as a humanitarian effort, I am nevertheless opposed to the bombing.  I have no doubt that terrible atrocities are being carried out in Iraq, but I am aware also that many atrocities have been committed over the years by Britain's armed forces, and yet we never prosecute our war criminals.  Likewise, many atrocities have been committed over the years by third world dictatorships which were and still are propped up by British taxpayers' money, and yet we do not prosecute the government ministers or civil servants who make these payments.

It is only a few years ago that an African torturer called Phillip Machemedze won the legal right to live indefinitely in this country.  A handful of MPs and journalists bleated about the injustice of letting Britain be a safe haven for evil men like him, but as usual it was just for show. Quite simply, if you vote in elections for political parties which support Britain remaining in the Council of Europe, then don't pretend you care about how Britain is run.

The ongoing carnage in Iraq is the result of western imperialism.  So too are the bombing of Gaza by Israel and the civil war in the Ukraine.  The Americans and the British invaded Iraq and deposed Saddam Hussein, thereby destabilising the entire country.  The Americans and the British allowed a group of Jewish terrorists to establish the nation of Israel, thereby condemning their Arab neighbours to an almost unrelenting campaign of terror.  The evil European Union arranged for President Yanukovych to be removed from power illegally, thereby destabilising Ukraine.

I wonder if the people who support air strikes on Iraq can offer any serious arguments as to why these air strikes could not possibly make the situation worse.  I am sure they will protest that they have no intention of making things worse, but the record of achievement of western intervention does not make encouraging reading.

I hope that as many refugees as possible will escape the rebels, and I accept that it may be necessary for some of them to seek asylum in adjacent countries.  My opposition to western military intervention remains unflinching however.  Rather than drop more bombs, the Americans should prosecute and hang their war criminals.

Related previous posts include:
A dilemma for the war pigs
MH17 and Gaza: western imperialism
Cameron visits Israel
The west should stay out of Ukraine

A northern transport renaissance

The government has claimed that it wants to build a high speed rail link in the north of England.  Apparently this would connect Newcastle Upon Tyne with Manchester, and would take in Sheffield.   The estimated cost would be £15billion, although the true cost would almost certainly be higher.  Even if the estimated cost is correct, then it still represents £234 for every man, woman, and child in the country.

The north of England is bisected by a range of hills called the Pennines, and this range of hills has always formed a serious impediment to east-west transport.  Between the valley of the River Tyne in the north and the valley of the River Trent in the south is a distance of nearly two hundred miles of almost continuous uplands, with the only significant break being the Aire Gap.  As this runs from south east to north west, it is of limited use to transport planners.

An example of how this affects rail travel is the journey time from York to Liverpool.  Liverpool is roughly eighty-seven miles from York, whereas the distance from central London to Bournemouth is slightly greater at around ninety-three miles. Yet in spite of this the train journey from York to Liverpool Lime Street takes roughly twenty minutes longer than the train journey from London Waterloo to Bournemouth.

In short it appears likely that a new railway line which tunnels under the Pennines could provide a considerable economic benefit to the north of England. Then again, where would that benefit originate?  Here are some possibilities.

Businesses in the south relocate to the north.  While this benefits the north, it is at the expense of the south.  As far as the national economy is concerned, no new prosperity has been created.  Existing prosperity has merely been shuffled from A to B.

Businesses outside the UK relocate to northern England.  This too is merely the shuffling of existing prosperity, but at least in a way which benefits the whole of this country to some extent.

New businesses will arise.  In other words, shaving twenty minutes off the railway timetable will unleash a new entrepreneurial spirit in the north of England.  It might happen I suppose.

It is unsurprising that this policy should be announced with less than a year to go before the next general election.  Of course the government could have announced this policy a long time ago, but they were too busy increasing the aid budget.  The expected cost of this project is roughly similar to Britain's expenditure on overseas aid during the first two years that David Cameron was prime minister.

The government has long since committed itself to the lunacy of HS2, as well as the more reasonable Crossrail project, which it now plans to extend.  While the government does seem to be getting some things right, I can't help but wonder where the Conservative Party would be in the opinion polls if David Cameron had cut the overseas aid as soon as he took office, and if he had never committed to HS2.

Related previous posts include:
Shapps and the northern renaissance
The lunacy of HS2
HS2 Fat Cats

An MP's fall from grace

The former MP Denis MacShane has written in a national newspaper about the prison term he served after being convicted of false accounting.  Recalling a visit from a solicitor, he states that:

He says I made a big mistake in not fighting my case politically.

I trusted the system, but failed to read it. Small print often catches you out, but unspoken small print is fatal.

I have no idea what the solicitor meant by trusting the system, or reading the system, or unspoken small print.  If I've got it right, MacShane submitted dishonest claims to cover the cost of travel in Europe - costs which would have been either not reimbursed or not fully reimbursed if he had sought to claim the money honestly.  The Daily Mail appears to accept the ludicrous assertion that MacShane did not profit from his misdeeds.

It is not clear what the solicitor meant by fighting the case politically, but he may be referring to the ongoing abuse of the expenses system at the time.  I quote MacShane in full on this matter:

Using the mortgage interest payment to speculate in the London property market really took off after 2001.

You could see the new boys and girls at the Tory end of the tea room getting tutorials. They were told to designate a modest flat in their constituency as their main family home, and then they could take out an interest-only loan on their existing London house. MPs could claim up to £2,000 a month in mortgage interest payments, which meant a loan of up to £800,000 to spend as you liked providing you showed a statement from a bank that you were paying £2,000 a month in interest.

My neighbouring Rotherham MP Kevin Barron talked  openly about buying a ritzy flat using this system and, when he sold it, the Daily Telegraph and The Guardian reported he  made nearly £500,000 in profit.  All this was perfectly within  the rules, and he should know.  He is the chairman of the Commons Standards and Privileges Committee.

Then there’s buying a large house in your constituency using  a substantial mortgage interest payment from the taxpayer and then enjoying the accrued value. David Cameron bought his home in the wealthy Cotswolds town  of Witney. With an estimated  family wealth running to £20 million or £30 million, he had no need to be subsidised by the taxpayer.

But month by month  he claimed a steady £1,081 in mortgage payments as his investment increased in value. This was all perfectly within the rules as they existed. 

Then there was the petty cash diddle. MPs could claim £250 a month under a heading ‘Petty Cash’ without producing a single receipt. George Osborne pocketed his monthly £250 with gusto. 

He also claimed back for interest rate payments for a mortgage worth more than the value of  his house. He probably wishes  getting money into the Treasury coffers was as easy...

I had never heard of the  John Lewis list – some guide to furniture that could be bought that would be accepted by the House  of Commons finance officials. 

State-of-the-art TVs, sofas or paintings for walls were all paid for by taxpayers. There are stories about mileage claims and MPs sharing a car home to Scotland or the far North of England and each claiming the mileage as his own. 

One of the biggest sources of extra income for MPs was to employ wives and children. In most modern democracies this practice is simply banned as corrupt and illegal. Not so here, where even today MPs employ family members.

The Tory MP Peter Bone gets the taxpayer to pay his wife £45,000 a year. Kevin Barron has had both his wives salaried by the taxpayer as well  as other family members...

Chris Grayling certainly has form on expenses, claiming  £5,000 to tart up a flat near Westminster as well as thousands in mortgage payments from taxpayers even though he had a big house in his Surrey constituency in London’s commuter belt. He also claimed mortgage help from the taxpayer on two properties. 

Dear, oh dear, why didn’t I  claim my expenses like other profiteering MPs?

In short, maybe the solicitor meant that MacShane should have pointed out in court that it was commonplace for MPs at the time to line their pockets with as much public money as possible. Nevertheless there is a difference to claiming money within the rules and breaking the rules.

I find it remarkable how little judgement almost all (or maybe all) of our MPs displayed at the time.  Did they really believe that they could boost their salaries with massive expenses claims without incurring the anger of the electorate?  I can only conclude that the answer is yes.

The simple solution is to stop voting for politicians with no judgement, and to experiment instead with voting for people who actually deserve our votes.

Related previous posts include:
A tale of two scumbags

The fat cat conundrum

This post is essentially a continuation of my previous post about Nick Hanauer's arguments about wealth creation.  When you are poor you need to spend your money as productively as possible.  By contrast, when you are rich you enjoy the luxury of spending your money unproductively.

In addition, you possibly also enjoy the luxury of helping to ensure that poor people remain poor.  You can do this for example by exploiting the unwillingness of your employees to ask for a pay rise, or by exploiting the unwillingness of customers to quibble over prices.

If we start from the perfectly reasonable assumption that - collectively - rich people benefit the economy to a far lesser extent than middle class and working class people, then we are justified in asking why the government does not require rich people to pay more tax.

Surely therefore it makes sense for the government to encourage the nation's wealth to be spread as evenly as possible across the population.  However this has not proven easy to achieve.  Some governments, such as the French government led by President Hollande, have tried increasing the marginal rate of tax paid by rich people, but the outcome is often to drive prosperity out of the country.  Rich people leave France to avoid the higher taxes, and take their wealth with them, and so wealth leaves the economy rather than being redistributed.

Some readers might see this as proof that rich people are in fact wealth creators, but this is not the case.  Suppose I am rich because I win the national lottery.  I am not a wealth creator because the lottery creates no wealth.  It merely takes money from people who ought to know better and shuffles it around the economy.  If I go to live in another country, then I am taking my money out of the economy, but the money I am taking out does not represent any wealth that I created.

The wealth I am taking abroad was created by invention and manufacture, and was distributed - efficiently or inefficiently - by market forces.  Similarly, if I am rich as a result of playing the stock market, then I am rich because I bought shares that other people wanted to sell, and then sold the shares that other people wanted to buy.  I did not make my money alone.  If I am rich as a result of business, then I am rich because, for example, I sold manufactured goods which other people wanted to buy.  Other people made me rich.

In my previous post I implied that Nick Hanauer was not entirely correct.  He implies, or appears to imply, that there is a case to be made for increasing taxation on the rich, but he does not consider the likelihood that higher taxation would lead to rich people taking money abroad.

I wrote in an earlier post that:

If David Cameron wants to help businesses, then he should bring in a law requiring companies not to pay large salaries to their directors unless creditors are paid on time, and the company remains solvent.

I have since argued that employers should not be allowed to pay big salaries to their directors unless no one in the company earns less than 140 percent of the minimum wage. I see no need to step back from that point of view.

Related previous posts include:
The cats stay fat
Energy sector fat cats
Austerity versus democracy

The myth of the wealth creators

Followers of my blog will probably know that I have a low opinion of company directors who earn obscene salaries.  I have recently come across the video of a TED lecture by American businessman Nick Hanauer.  The lecture dates from more than two years ago, and I wish I had come upon it sooner.

I am not sure to what extent Hanauer has changed my mind - if at all - but I do know that he has helped me to be a lot clearer about my point of view, which remains largely unchanged.

Anyway, please take a moment to watch this video of an interview with Hanauer.  I will add my comments below.

At the most basic level, Hanauer is right.  Suppose you open a shop, and lots of people buy from you without ever quibbling over the price.  The outcome is that you become very rich, and you might find people referring to you as a wealth creator.

Now suppose instead that no one buys from your shop, and you end up bankrupt.  If success makes you a wealth creator, then does failure make you a wealth destroyer?

If there are such things as wealth creators, then surely they are inventors.  The mere act of buying and selling does not create wealth, but it allows some people to become wealthy.  True wealth exists in the invention and distribution of new products.  Some readers might be thinking that rich people help with the process of distribution, but it might be closer to the truth to say that they hinder it.

A digression is called for.  Suppose you are a rich person, and you pay some workmen to dig great big holes in the ground and then fill them in again.  On the one hand you have benefited a group of workmen by giving them employment, but on the other hand there is no lasting benefit to what you have done.  At some point you will run out of money, and there will be nothing to show for it.

This may seem absurd, but take a moment to look around your home.  You may possess such things as books you never read, DVDs you never watch, and board games you never play.  The money you spent on those things might as well have been spent on digging a hole in the ground and filling it in again.

Now suppose you are rich.  You might well be tempted to spend your money on cars you rarely or never drive, and houses you rarely or never live in.  In other words, you might be tempted to spend your money in a way which has little or no lasting value.

It is not inevitable that rich people will spend their money frivolously.  For example, Michael Owen bought an entire street of houses in the Welsh town of Ewloe for his relatives to live in.  Nevertheless there does appear to be a lot of reason to be critical of the way in rich people spend their money.

Suppose a rich person gives ten million pounds to charity.  The same benefit could be achieved by one million working class people giving ten pounds each.  Suppose a rich person hires Gary Barlow to perform a private concert.  Gary Barlow could earn the same money or maybe more by playing an arena concert to thousands of ordinary people.  Suppose a rich person buys two large houses for five million pounds each.  The same money could buy houses for maybe as many as one hundred middle Englanders.

Even if our rich person buys two houses that cost less than five million pounds each, then the fact remains that he owns one more house than he needs.  Next time your local council allows a housing developer to concrete over another piece of green land in your home town, reflect that there would be less need for new housing if everyone owned just one house.

In short, the idea of rich people being wealth creators is massively flawed.  Not only are they not really wealth creators at all, but depending on how they spend their money they could actually be stifling the prosperity of society as a whole.

Related previous posts include:
The banksters are not Jonathan and Charlotte
Fat cats and commies