Madsen Pirie

The answer for income tax seems to be anything over 40 percent.  At 40 percent people grumble but they pay it. Above 40 percent they begin to employ accountants to find creative deductions and to use tax shelters. Their companies start to relocate their head offices to friendlier places. When UK income tax was raised to 50 percent, one hedge fund relocated abroad where its personnel paid no UK taxes. The Treasury lost from that one firm all the revenue it had anticipated making from the tax increase. And others moved out as well.

London is already the world’s fifth largest French speaking city, and Francois Hollande’s new 75 percent rate for high earners could well move it further up the league table. Gerard Depardieu’s move to Belgium highlights the exodus of talent that is taking place. As I said in my “Economics is Fun” videos, an increasing share of the economy is based on talent, and talent is mobile. The lesson is to keep taxes low enough to keep people.

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My PhD thesis at St Andrews was entitled “Trial and Error and the Idea of Progress,” and was published in 1978 under that title by Open Court in the United States. I returned recently to its themes in a discussion, and decided to revisit it. It is long out of print, and over the years my copies have dwindled to two. I decided to digitize it by scanning a copy and using optical character recognition, but was reluctant to sacrifice one of my only copies. The ever-helpful internet found me two ex-library copies available second hand, so I ordered them, feeling somewhat like J R Hartley. Then a friend suggested that I should outsource the digitization to India, where labour costs less and command of English is no less good, so I opted for that solution.

The book examines progress, deciding that there must be a clearly delineated aim, and a means of determining which steps move closer to that aim. Creative proposals designed to achieve our aims must be testable against competing ones to determine which of them do so better than their rivals. I’ll save the rest of it until I have an electronic copy to share…

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The UK government seems anxious to present itself as efficient in its management of detail. Whether it is or not is open to question, but most of its proposals are concerned with the implementation of policy at the micro level. It alters a threshold here and changes a rate by a percentage point there. What seems to be lacking is a broad idea, some vision of the sort of society it seeks to bring about, or some insight into what makes things the way they are, and how that might be changed.

We are seeing plenty of leaves and twigs, but no glimpse of the wood or the forest. People can endure hard times if they have hope of better ones. They can trudge through the trough of a depression if they can catch sight of the sunlit uplands beyond. Notably lacking at present is any promise of what future society might be like to make it worth striving for.

An honourable exception is in education, which needed change more than most. But the Treasury, which might be presenting a total reform and simplification of the tax code, concerns itself instead with manipulating petty details that magnify its complexity. This parliament is already halfway into its anticipated turn, leaving not much time to present a forward-looking and imaginative exposition of a future that will make the government worth re-electing.

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I found another use for those dreadful supermarket own brand rice krispies.  After the delicious Rice Krispie Chocolate Cakes I made, there were still plenty left, so I made some Rice Krispie Treats.  These involved marshmallow instead of chocolate.  The recipe I used called for 150gm of marshmallows (about 5 oz), plus roughly an eighth or a sixth cup of butter, and three cups of the dud rice krispies. I melted the butter with just a touch of oil to stop it burning, then stirred in the marshmallows, moving it around the non-stick pan so it didn’t burn. I took it off the heat and stirred in the krispies, making sure they were all covered. I poured the mixture into a baking tin that I’d lined with baking parchment. The stuff is very sticky, clinging to metal or wooden spoons, so I pressed it down with my fingers, using another piece of baking parchment on top to keep my fingers from sticking. That’s it. I let it cool then sliced it into sections. Quite nice, and very different from the chocolate crisp.

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NASA announced in August that it was narrowing to three the private companies tasked with building and operating manned spacecraft. They are Space Exploration Technologies (SpaceX), Sierra Nevada Corporation, and Boeing. SpaceX have successfully flown the unmanned Dragon spacecraft to the International Space Station and recovered it.  SNC are developing the Dream Chaser, a manned lifting body orbital vehicle, while Boeing already have the secret X37B unmanned military spaceplane.  The latter is launched atop an Atlas 5 rocket, protected by a nose fairing.  It resembles the Space Shuttle, though is only a quarter of the size and in controlled automatically from the ground.  In this it resembles the Russian Buran vehicle which made one successful unmanned flight to and from orbit before it was retired.  I went on board one at Baikonur in Kazakhstan, and noted its chief difference from the shuttle – it has an engine, again like the X37B.

A further X37B launch took place this week, with its purpose unspecified, though since the vehicle has already proved it can stay in orbit for many months, many suppose that espionage is part of its mission. The technology is quite unlike the CST-100 capsule Boeing is developing for NASA, a vehicle designed to take 7 astronauts and make a parachute landing on the ground rather than water.  All of the three companies are developing technologically different solutions, ones that draw on the experiences of previous space exploration vehicles. It all means that a very exciting time is coming up for manned spaceflight.

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The Committee on Climate Change has released a report timed to coincide with the UK government’s announcement giving shale gas the go-ahead. The CCC report contains fanciful predictions about future costs in order to suggest the green energy will save householders money instead of costing them extra (which it does).  The problem environmental lobbyists have with shale gas is that it is a game changer.  It is a fossil fuel, but one in plentiful supply, maybe for centuries. It is cleaner than coal or oil, and not located in politically risky areas.  The US looks set to become a net energy exporter because of it.

The imposition of the higher costs of renewable energy is beginning to look unnecessary, as are the hair-shirt warnings that we must curb our consumption, abandon the wealth-creating process, and go back to older and simpler lifestyles. Gas has changed the game, and the UK government, to its credit, has spotted that.

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Creativity has always interested me.  In a chapter of my PhD I explored the notion that it might start with comparison and criticism.  I suggested that societies rapidly thrown into extended contact with others might be led from comparison of different ways to criticism of them. That might lead in turn to emulation of some aspects that produced desirable results.  From proposing ways that have been tried elsewhere to proposing ones that have not is the point at which creativity comes into play. You daydream the new idea instead of observing it done elsewhere.

A new study suggests that if we give ourselves the chance to daydream by performing easy tasks, we augment our ability to think up solutions to problems.

The study showed that people who returned to a difficult task after taking a break and doing an easy task boosted their performance by around 40 per cent. But there was little or no improvement for people who did another demanding task during the break, used it to rest or did not have a break at all. Scientists who carried out the study said the results indicate that doing simple tasks that allow us to daydream is key to solving trickier questions playing on our minds.

The lesson is to leaven the complex tasks with simple ones, and it might boost creativity.

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I just received six copies of a Chinese edition of “How to Win Every Argument,” my book on logical fallacies.  It arose originally out of the logic classes I taught at Hillsdale College in the US.  The students seemed to like my treatment of logical fallacies, so I wrote it up as a book, published by Routledge as “The Book of the Fallacy.”

Many years later Continuum asked me to update it and extend it, and published it as “How to Win Every Argument.”  I’m not sure about the title, but it does sell steadily, and has run into different editions in several languages.  I’m also not quite sure if my wry humour translates very well into Chinese, but the logical structure of most of the fallacies should hold good for different languages. It was a fun course to teach and a fun book to write. I hope it’s given my readers some pleasure…

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Owen Paterson, the Environment, Food and Rural Affairs secretary, has said that GM food should be grown and sold widely in Britain. This is the cue for the floodgates to open for nonsensical and ill-informed warnings about the ‘hazards’ posed by genetically modified organisms. Even the heir to the throne has previously joined this ignorant chorus.

GM organisms will probably enable us to produce crops which fertilize themselves and protect themselves from pests. That will reduce the spread of fertilizers and pesticides. GM technology will probably give us crops that are saline tolerant, drought resistant, and which can thrive on marginal land. This reduces the incentive to clear rainforest land for agriculture.  GM organisms will enable the growth of crops that fight disease and malnutrition, and do a whole lot more besides. Far from constituting a menace, they will probably turn out to be the salvation of humankind, enabling us to feed increased populations while making a smaller impact on the planet.

But don’t expect any of this to stop the waling of environmental lobbies seeking to raise new funds on the back of new alarms….

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A report by members of the Home Affairs Select Committee suggests that a Royal Commission should be set up to investigate whether Britain’s drug laws are ‘fit for purpose.’  The claim, difficult to deny, is that Britain is losing the war on drugs, and that it might be time to consider whether an alternative approach might be tried. It would be very difficult to make a case that anti-drug policy was effective.  Every time the problem is highlighted, most of the media call for tougher laws and tougher sentencing, which is what we’ve been doing for at least three decades.  This is the policy that has not worked. The Portugese example is reportedly under scrutiny because it represents an alternative approach.

The MPs also looked at changes in Portuguese law where possession of a small quantity of drugs is no longer a criminal offence, but is instead regarded as a less serious “administrative offence”. Since the changes were made, it is said that robbery has fallen and there has also been a decline in HIV infection from used needles.

A different approach is long overdue.  The sheer level of crime associated with the illegality of drugs calls to mind the era of prohibition of alcohol in the US, and the crime wave it triggered before it was repealed.  The key question to ask is whether a more permissive approach would lead to better or worse consequences than those that arise from prohibition.

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