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On the morality of taxation and how to minimize the harm it does

Moller 0010Yesterday I addressed a conference of the Young Britons’ Foundation at Churchill College in Cambridge.  The theme of my session was the morality of taxation, and I put forward the view that taxation is basically immoral when it is coercive, which it nearly always is.  To a libertarian, coercive behaviour is only justified to prevent people from harming others.  Taxation takes away our choice to allocate our resources according to our priorities and values, and makes us live by someone else’s, like pawns on someone else’s chessboard.  Sometimes taxation forces people to fund things they have moral objections to, such as war, bank bailouts or abortions.  It can undermine personal responsibility by making people think it is the state’s job to look after others, and it can crowd out private morality by pre-empting the funds people might otherwise have used for good purposes of their own.  Taxation often promotes internal divisions, with interest groups vying against each other to secure resources.  It gives politicians the money to buy votes with, and it makes society poorer by increasing the costs of the transactions that create wealth and prosperity.

All of that said, taxation might be immoral, but it is alas also necessary, and the question then comes down to minimizing its harmful consequences.  Adam Smith set out four canons for making a tax as fair as possible.  Firstly, the cost of collection must be low compared to its yield.  Secondly, the timing and amount must be known, without allowing tax collectors the discretion that can lead to corruption.  Thirdly, the means and timing of the payment must be convenient to the payer.  For example, when wages are made or a transaction takes place, a little of the money generated can be conveniently collected by the state.  And fourthly, Smith said that taxation should fall mainly on those who can pay.  Yes of course.  They can afford it more easily.

I add a fifth canon to Smith’s four: No tax should damage the economy out of all proportion to the revenue it raises.  I cite Corporation tax as an example.  It is not paid by corporations, but by employees, customers or shareholders.  And it seriously holds back the wealth creating process.

There are reasons why markets are not very popular in some quarters

steet mktTim Worstall introduced readers to the word “emporiophobia,” meaning the fear of markets.  One reason it is so prevalent is that supporters of markets tend to talk about “competition,” whereas the essence of a market transaction is co-operation.  The exchange takes placed willingly because each values what the other one has more than what they offer in return.  It could also be that the English upper classes have traditionally disdained “trade” and regarded land management as an activity much more appropriate for gentlemen, when they were not hunting, shooting and fishing.

Markets have also had a bad press because they largely reward economic contributions rather than intellectual ones.  Many writers and thinkers feel aggrieved that they are not given the high status and rewards that they think deserve.  I think security is a factor, too, in that the outcomes of markets are uncertain and unpredictable, and leave people in fear of the harm that an unknown future might bring.  There is a plausible theory that we are hard-wired to pay more attention to danger and bad news for good old survival reasons, meaning that predictions of doom and chaos will always command attention.

I, on the other hand, although a writer and to some extent a thinker, am happy putting more trust in markets than in meddlers.  On the whole the greater numbers seem to get it right more often than the few on the central committee, and markets are quicker to recognize errors and take corrective action.  Despite all the disasters I remain optimistic that the future will be better than the past.  It will make more choices and more chances available to us and will present undreamed of opportunities.  Unfortunately this does not make for nearly such a good story as imminent disaster does.

The advanced technology winglet from GKN Aerospace will save fuel costs

wingletThe Department for Business, Innovation and Skills is justifiably proud that a British multinational, GKN Aerospace, has been awarded a contract by Boeing to supply advanced technology winglets for its forthcoming 737 MAX aircraft. The Department is so proud of this that they set up a model of the winglet outside their Victoria Street offices to show off to passers by.

The upgraded 737s are scheduled to fly in 2016 and start being delivered to airlines in 2017. GKN will manufacture the winglets in Cowes, Isle of Wight, safeguarding hundreds of highly skilled engineering jobs in the UK. The winglet has a complex composite structure and its more efficient airflow will save an estimated 1.5 percent on fuel costs. This may not sound much, but it represents billions of pounds saved by airlines over the course of the 737s’ working lives. It is part of a series of design updates incorporated into the 737 MAX that will between them give it an 8 percent per passenger seat cost advantage over its likely competition. GKN is a world leader and one of the UK’s most visible success stories, so plaudits all round, guys, on winning the contract.

This could grow into a worthy rival to Formula One. It’s the all-electric Formula E

The first series of Formula E will run from Sept 2014 to June 2015.  It has ten team spots, all taken, and each with two drivers.  Several celebrities are involved, including Richard Branson and most recently Leo DiCaprio.  The first race will take place in Beijing, and other venues include Rio, Buenos Aires, Los Angeles and Miami, and it will close in London.

This will be an “open” championship, meaning that teams are not restricted, as they are in Formula One, to the same engines and the same basic technology.  In Formula E they will be able to use different drive-trains, though there are basic specs that all teams must comply with.  One effect of this will be to speed up the development of new electric vehicle technology.  Unlike Formula One, drivers at pit stops will not just replace tyres or batteries, but will be able to change to an identical ready-to-go replacement car.

The above movie shows the Spark-Renault clocking in at the mandated 800kg.  Its output is 240hp, which it can use in practice qualifying, but it can only use 180hp while racing, except for “push-to-pass” opportunities.  Top speeds are estimated at about 140 mph.  The model shown in the above video was restricted in the test to only 25 percent of its power.  You’ll note that Formula E is refreshingly quieter than Formula One!  And I rather think it will be less of a health hazard to watch races in real life rather than on TV.

Heavyweight mentions on the Samizdata blog

Child3The widely-respected and very popular Samizdata blog seems to have heaped praise on me last week in several pieces.  I guess I can live with that.  They mostly liked the point I made to Brighton University about how our side prefers to compare the present with the past rather than with a hypothetical and imagined future.  They also praised me for speaking to audiences of young people and trying to present a coherent and attractive case for liberty.  And there was a great review of “Children of the Night,” a science fiction novel for young adults I published in 2007.  I did not consciously put any of my philosophy into that book, but it seems to have permeated it in ways I did not realize at the time.  I try to write stories that are full of action and excitement, and in which my young protagonists face difficulties and dangers by drawing on strength of character.  SF is by its nature usually individualistic.  You don’t look for government to solve problems; you do it yourself.  The one book that did bring out some of my philosophical attitudes was “Tree Boy,” and the message there was not all that controversial, as one reviewer spotted.  Hey well, I’m about to start writing my seventh….

Yet another planet is discovered to overturn our theories of planetary formation

newplanetOr will it?  The one just discovered is about 12 times the size of Jupiter, yet it orbits its star at a distance of over 600 billion miles.  Some conventional theories suggest that planets coalesced through collisions in the leftover material when the sun formed, but this is too much material and too far away.  The planet, designated HD 106906, is a youngster in astronomical terms, being only about 13 million years old, compared to the Earth’s estimated 4.5 billion years.  It orbits a white main-sequence star in the constellation Crux around 300 light-years away from Earth.

Given its size and distance, a fairly obvious explanation suggests itself, and it seems to be the one the discovery team scientists are leaning towards.  That is that the object was not formed by colliding asteroids, nor from a spinning disc of gas and dust around its parent star.  It is that the object could more accurately be described as a failed star, and would have been part of a binary system with the one that did ignite.  HD 106906 just didn’t have enough material to produce the pressures and temperatures it takes for a star to be born.  Like its adjacent star, it collapsed from a clump of gas, but in this case not large enough to ignite thermonuclear fusion.  There’s a problem with this explanation, too, in that typically the mass ratio of two stars in a binary system does not exceed 10:1, yet in this case the ratio is over 100:1.  So we might have to revisit our theories of binary star system formation as well as those of planetary formation.  All of which makes HD 106906 a really interesting object.

The Copenhagen wheel from MIT adds power to your bicycle, but it’s your own power stored in its battery

MIT engineers have produced a very welcome addition to the conventional pedal cycle, the Telegraph reports.  Cycling is fine until you come to a steep hill or severe headwinds, then it can be a pain.  The solution is to replace your rear wheel by one containing a red disc, inside which is a small motor and a battery.  It stores power in regular cycling and uses it when needed to give up to ten times your usual power.  The motor is a 250W (EU) one with a 48v lithium battery.  It fits a standard 26 inch wheel.  You use your smartphone clipped to a handlebar socket with an app that customizes it to your riding style.  It has 4.0 bluetooth connectivity .  The battery life is set at 1,000 cycles, and it takes 4 hours to recharge.  The bike’s top speed when the motor is in use is 20mph.  Designed at MIT in co-operation with the city of Copenhagen (hence the name), the bike is designed to transform city cycling by making everyone capable of doing it with comparative ease.  And of course riding it uses no fossil fuels…

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