On the Record | Government Is the Cause of “Brexit-Trump Syndrome”

Please see my latest post for the Quarterly Review, ‘Government Is the Cause of “Brexit-Trump Syndrome”’:

The Powers That Be never fail to demonstrate why they have earned the enmity of the average citizen. Bound up in a cocoon of self-satisfaction and self-denial, their political coup de grâce cannot come soon enough. This self-important élite are flummoxed by the people’s revolt in Britain and America, known respectively as Brexit and the Trump movement. A recent column dispatched from the prestigious London School of Economics and Political Science amply displays their continuing bewilderment.

Coining the term ‘Brexit-Trump Syndrome’, British academics Michael Jacobs and Mariana Mazzucato claim that an inability to understand economic reality explains why average working-class citizens, who suffered lost jobs and wages and failed to bounce back from the Global Financial Crisis of 2007-09 (despite billions spent in stimulus schemes), voted either to exit the European Union or put Donald Trump in the White House. Both described as ‘disastrous’ socio-economic choices. The implications drawn are that people were duped into voting against their financial interests. Au contraire.

To counter such continuing nostrums leading to government and economic failure, there is no better guide forward to liberty and prosperity than John Stuart Mill.

Read more . . .

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My thanks to editor Dr Leslie Jones of the Quarterly Review.

On the Record | Government Greed Axes the Golden Goose

Please see my latest post for the Quarterly Review, ‘Government Greed Axes the Golden Goose’:

President Barack Obama mounted the bully pulpit again last month, to decry the practice of ‘tax inversion’ and those corporations with the effrontery to believe in private property and the profit motive, thus escaping exorbitant tax bills by moving operations out of the United States for the welcoming low-tax jurisdictions of foreign lands.

According to an AP News report:

“Obama called it ‘one of the most insidious tax loopholes out there’ because it shortchanges the country. He said less tax revenue means the government can’t fully spend on schools, transportation networks and other things to keep the economy strong. He said the practice also hurts middle-class Americans because ‘that lost revenue has to be made up somewhere.’”

Oh, dear! Where does one begin to enumerate President Obama’s recurring penchant for economic (and constitutional) illiteracy?

Read more…

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My thanks to Dr Leslie Jones of the Quarterly Review.

DMI 2013 Round-Up

While there have been no official DMI updates in a very long time, research has continued apace — although very slowly due to various computer malfunctions and interruptions. Nevertheless, here is a round-up of essays published this year:

• ‘If elections have consequences, then so does economics’ — A look at the Laffer Curve, when high marginal tax rates result in lower revenues, not more.


• ‘Depardieu bids French statists “Adieu!”’ — More on the Laffer Curve, when high marginal tax rates entice wealth creators to flee to more amenable tax jurisdictions.


• ‘March out the vote!’ — Does the State have the right to force individuals to vote, or does such action confuse which demands deference and precedence, citizens or their government?


• ‘The inexorable lessons of currency debasement’ — On the evils of inflating the money supply.


• ‘Median voter theorem: why mainstream parties adopt similar policies’ — Why do opposing political parties so often cling to the centre and present similar policies to the electorate? What does this mean for principled ‘ginger’ groups embedded within such larger organisations?

Several projects-in-hand will continue in the new year: One example is the paradox interwoven in F.A. Hayek’s economics and politics; another involves the phenomenon of ‘liberal Toryism’ — the dynamism between classical liberal laisser-faire economics and the traditional Tory belief in ‘limited paternalism through the State’, ideas which have overtones in the work of Adam Smith and Edmund Burke, and find continuing expression in the 21-st century through various British and American theorists — more to come!

Another experiment in the coming months will be #DMI_Reads, where I will ‘tweet’ my current reading lists and ask for feedback and complementary book recommendations.

As always, remember to follow DMI on Twitter, on Facebook, and (here) on its dedicated page.

All best wishes for 2014!

DMI Omnibus Update on Disraeli’s Birthday

Earl of Beaconsfield

While research and writing at DMI continue unabated, I have been remiss at sending out update notices for several published columns over the last several months. And so without further delay — and in honour of Benjamin Disraeli’s 208th birthday! — here are links to recent postings at the Institute of Economic Affairs and the Adam Smith Institute to get you caught up:

• ‘The organic roots of oaks and free markets’ takes a tongue-in-cheek Telegraph column and illustrates why the Conservative party’s modern icon of an oak tree is an excellent exemplar of the organic dynamism of free markets, and why a return to the ‘Thatcher torch’ — representing the light of liberty — is a bad omen if taken to mean more robust government intervention in the economy.


• ‘Tax Freedom for the Poor!’ is an appeal to raise the threshold at which the low-paid begin to pay income tax — allowing them to keep more of what they earn will build their self-respect and act as a work incentive, while at the same time curbing the extent of government redistribution. (A second theme of this posting is that while the poor who earn less than the threshold will necessarily be removed from the income tax register, they nevertheless still do pay any number of ancillary taxes, which may itself be considered a good thing: An esprit de corps is fostered with their fellow citizens while making them conscious of the true costs of government.)


• ‘Without capitalism, can there be culture?’ argues that we owe much of our cultural attainment because of the free market and the division of labour which it encourages — not despite of them. (I will admit that other factors contribute to culture, too.) This avenue of defence will be familiar to students of Adam Smith and to admirers of Josef Pieper’s small classic Leisure: The Basis of Culture.


• ‘America’s Chief Magistrate and the Spirit of ’76’ looks at American politics from the perspective of the Founders’ vision of individual liberty and limited government. Intended to be a rather minor position, the Presidency has assumed powers never intended either for the Chief Executive or the Washington establishment. Intrusions into the actions of individuals and the marketplace are hallmarks of ‘government failure’ that only a spirited return to constitutionalism can avert.


• ‘Can Americans afford compromise on the fiscal cliff?’ demonstrates that, à la Laffer Curve analysis, if higher tax revenues are the object, then raising the marginal tax rate on the wealthy is not the answer; though Aristotle taught that compromise as a mean between deficiency and excess is oftentimes the route to realising the common good, when the options are between right and wrong there is only one option. (Cross-posted at Public Finance International.)

Well, that’s a wrap. A reminder, too, to join the discussion on DMI’s Facebook page (please sign-up if you are not already a member) and tell your friends and neighbours about us.

Wishing you a very Merry Christmas, Season’s Greetings, and all best wishes for 2013!

The Global Economics of Corporate Tax Cuts

With the burgeoning of the modern welfare state, taxes on corporations are widely accepted as one of the least offensive ways to raise funds to pay for them. But is this true?

Corporations — and, more accurately, their fiduciary officers — are self-interested organisations, which pass along tax burdens in the form of increased prices to consumers; where competition limits such price flexibility, costs are borne by employees or by reductions in capital accumulation.

As students of the Laffer curve theory know, too, raising taxes does not necessarily mean increased tax revenues; as the wit says, oftentimes less is more.

Moreover, in to-day’s globalised economy, nations seeking to attract businesses must compete with other countries by offering levels of taxation that are conducive for enterprises to set up shop within their borders — and to remain as satisfied tax-payers, untempted by the allure of foreign tax incentives.

Recent Canadian economic news — both in relation to arguments for higher corporation taxes and the revenue generated through lower taxes — is instructive.

Click here for my full argument at the Adam Smith Institute.