Globalization — a win-lose situation

Published by Anonymous (not verified) on Wed, 13/06/2018 - 10:35pm in



ZEIT ONLINE: Einigen Menschen würde es ohne Globalisierung also besser gehen? Holger Görg: Ja. Das ist das große Problem der Globalisierung. ZEIT ONLINE: Was kann man dagegen tun? Görg: Da sind die Staaten gefordert. Es muss ein soziales Sicherungsnetz geben, das die Menschen auffängt und ihnen ein Einkommen garantiert, wenn sie ihren Job verlieren. So […]

New Study on Rising Suicide Rates in the US Suggests Capitalism Is Quite Literally Killing Americans

Published by Anonymous (not verified) on Wed, 13/06/2018 - 7:13pm in

by Grit Post Editorial Board, June 11, 2018 A study released late last week showed that suicide rates have risen significantly across the country. The culprit appears to be capitalism. t’s largely assumed that people who decide to kill themselves are suffering from a mental illness. Mental Health America estimates that 30 to 70 percent of Americans who end their own lives are suffering from either severe depression or bipolar disorder. However, according to a study conducted by the Centers for Disease Control and Prevention (CDC), 54 percent of Americans who committed suicide in 27 states in 2015 had no known mental health condition. The CDC study, which examined suicide rates in all 50 states between 1999 and 2016, found that the rate of Americans taking their own lives increased by an alarming 38 to 58 percent in 12 states, 31 to 37 percent in another 12 states, and 19 percent to 30 percent in another 12 states. The CDC found that on average, suicide rates jumped by more than 30 percent for all 50 states. The only state that …

Publication of my submission to the Treasury Committee on tax avoidance and tax evasion

Published by Anonymous (not verified) on Wed, 13/06/2018 - 4:20pm in



As I mentioned recently, I made submissions to the Treasury Committee of the House of Commons on tax avoidance and tax easvion and separately on the VAT tax gap on 31 May.

The tax avoidance and evasion submission is now to be found here.

The evidence on the VAT gap appears not to have been published as yet.

It appears that I am the only UK academic to submit evidence on tax avoidance and evasion to this inquiry.

I will feature some aspects of my submission in other blog posts in due course.

Rebranding the economy

Published by Anonymous (not verified) on Wed, 13/06/2018 - 4:19pm in



Some people have been musing on how to rebrand this blog in the comments section over the last day or so. They think it possible that it might have a more alluring name. I’m not sure.

But what I do think we need to do is answer the question I was asked by an audience member last night, which was to find a short metaphor to rebut the household economy narrative.

I admitted I was not sure what that alternative was.

I doubt it is the modern monetary economy.

Nor the state economy.

Is it ‘our economy’?

Or something quite different. Thoughts anyone?

Community currencies

Published by Anonymous (not verified) on Wed, 13/06/2018 - 7:24am in



Community currencies help energize the local community (as distinct from the speculation and paper-shuffling of much of the high-end banking sector).

What must we pay for our renewables protection policy?

Published by Anonymous (not verified) on Wed, 13/06/2018 - 7:24am in



Australian politicians are 'doubling down' again on their energy costs gamble. When their gambling goes awry, punters, and, inevitably, the economy, will pay.

Achieving fairness in the tax system

Published by Anonymous (not verified) on Wed, 13/06/2018 - 12:10am in

These are the slides I used for a talk at De Montfort University this morning on achieving fairness in the tax system:

  • A talk for the Taxation and Social Policy Group Launch Event - 12th June - De Montfort University, Leicester by Richard Murphy, Professor of Practice in International Political Economy, City, University of London
  • Some theory
    • Most of us are here because we are aware of austerity
    • This is the idea that, in formal terms
    • G = T
    • Where G = government spending
    • And T = tax revenues
  • But we know that austerity has not happened
    • G ≠ T
    • Instead the government has borrowed
    • G = T + ∆B
    • Where B = Total government debt
    • And ∆B = the change in government debt in a period, or total government borrowing
  • But this is not the whole story
    • The government has also created £435 billion of quantitative easing funding since 2009
    • As the Bank of England says:
    • “Quantitative easing involves us creating digital money. We then use it to buy things like government debt in the form of bonds.”
    • Which means that QE funds government spending instead of debt in that case
  • To give the whole story
    • Now
    • G = T + ∆B + ∆M
    • Where M is the stock of government created money
    • And ∆M is the change in that stock in a period
  • Why explain this?
    • What it means is that tax does not fund government spending
    • All government spending can be funded by money creation (not printing, I stress)
    • Or by borrowing
    • And the only reason why a government does not do this is because of the risk of inflation
    • In other words, the reason governments tax is to control. inflation - and not as such to fund government spending which can be and is all done by money creation in the first instance by overdraft at the Bank of England
  • This matters because it fundamentally changes our view of tax
    • I argued in The Joy of Tax that there are six reasons to tax:
    • Reclaiming the money the government spends into the economy to prevent inflation
    • Ratifying the value of money - because the government only accepts its own currency in tax payment it has value - which is what the ‘promise to pay’ now means
    • Redistributing income and wealth
    • Repricing market failure
    • Reorganising the economy - or fiscal policy
    • Reinforcing democracy - people who pay tax vote
  • This theoretical diversion has, then, been for a reason.
    • Social purpose is not a tack on extra
    • Tax is a fundamental instrument of monetary policy
    • And fiscal policy
    • And social policy
    • As well as industrial, environmental and every other policy you care to mention
  • But most important of all
    • If tax is not primarily about funding government spending then its role in creating social justice is more important than ever before
  • So what can make the tax system fairer?
    • First, we need to define inequality
    • And then see how tax exacerbates it
    • And then see what can be done about tackling those faults in the system
  • Inequality
    • Income inequality
    • Wealth inequality
    • Market access
    • Security
      • The social safety net
  • Income inequality
    • The tax system is notionally progressive
    • But
      • Those with excess income can take it out of income tax and take it into lower rate corporation tax
      • Or lower rate capital gains tax
      • And even offshore - sometimes legitimately
    • So a progressive system is undermined by tax spillovers within the tax system that favour the wealthy
    • Where a tax spillover is the way in which one part of the tax system reinforces or undermines the effectiveness of another part of that system
  • Income inequality (2)
    • The tax system is nominally progressive but:
    • Of the hundreds of tax reliefs and allowances most favour the wealthy
    • Pension tax relief costs more than £50 bn a year and is intensely biased to the wealthy
    • ISA relief costs billions and has the same effect
    • As do many investment reliefs
    • The annual cost is well over £60n a year
  • Income inequality (3)
    • NIC is regressive - it starts at low levels of income and is reduced at higher levels of income
    • All our indirect taxes are regressive
      • Council tax
      • Licence fees
      • Excise duties
    • VAT is regressive
      • Because the well-off do not spend all their income
      • Things they tend to buy more of such as education, health, houses, travel and financial services all enjoy major tax advantages for VAT purposes
  • Wealth inequality (1)
    • CGT is not progressive
      • Each person gets a second personal allowance
      • And the allowance if effectively transferrable within marriages and civil partnerships
      • Rates are low
      • Some incentives such as Entrepreneur’s relief are absurdly generous at 10% on £10 million of gain
  • Wealth inequality (2)
    • Inheritance tax is absurdly designed
      • It will capture the wealthy middle classes
      • But most higher levels of wealth still avoid it by gifts in lifetime or the use of trusts
      • But such planning requires there to be excess wealth - beyond that required to live upon or in (the family home)
      • Some investments, like estates, farms and private companies, are favoured without reason being offered
    • Offshore only remains open to the wealthy
  • Access to markets
    • Limited liability has a cost to the user and is only available to those who can afford it but protects wealth against failure
    • Having a single rate of corporation tax effectively lowers the cost of capital to large companies and creates unloved playing fields
    • Only large companies can really use offshore
  • Security
    • The price of a private social safety net - and the saving for it - is a lot lower in net of tax cost for the wealthy because of subsidies e.g. to pensions and low tax rates on savings
    • There is no such bias to those who use the state social safety net, from which the wealthy are not excluded
  • Action required
    • Education on the true nature of tax
    • Promotion of the 6 Rs of tax
    • Correct assessment of tax spillovers as they impact inequality and fairness
    • Equalisation of tax rates
    • Removal of subsidies
    • The removal of bias within markets
    • New taxes to create progressively - especially on wealth

Contrast explanations in economics

Published by Anonymous (not verified) on Tue, 12/06/2018 - 10:30pm in



For all scholars seriously interested in questions on what makes up a good scientific explanation, Alan Garfinkel’s Forms of Explanation (Yale University Press 1990) is a must-read. A lot of recent work done within different realist schools in theory of science — e.g. Roy Bhaskar, Andrew Collier, Richard W Miller and Tony Lawson — issue […]

The far-right think tanks like Jersey: now there’s a surprise

Published by Anonymous (not verified) on Tue, 12/06/2018 - 4:07pm in

I was interested in a headline in the Jersey Evening Post yesterday that read:

THE Island’s financial industry is arguably more transparent than those in the UK and the US and offshore centres like Jersey help to boost international investment, a report published by an accomplished economist has claimed.

Who is this person, I thought? They do tell all:

Diego Zuluaga, a policy analyst at the Cato Institute, based in Washington DC, has published a paper called Offshore Bet defending the role of offshore finance centres, such as Jersey, which are often criticised and labelled ‘tax havens’.

Now, I admit I have ever never heard of the accomplished person in question. But I have most certainly heard of the Cato Institute: it is a far right market fundamentalist think tank that has much regard for Trump but, I suspect, really thinks him a left winger. And the JEP notes:

The report says that offshore centres are often wrongly accused of the illegal activity of tax evasion and adds that they play an important economic role.

And how independent was this finding? Not very:

Jersey Finance, which promotes the Island’s industry, supported Mr Zuluaga’s paper. Writing on his blog, chief executive Geoff Cook said that the report, which was published by the UK’s Institute for Economic Affairs, brought more ‘balance’ to the arguments about international finance centres.

So Jersey Finance is trawling around the far-right think tanks, spilling cash along the way, and finding they think that tax secrecy designed to undermine tax revenues of legitimately elected governments is a good thing. I could have told you they'd say that for about 50p. I bet Geoff paid somewhat more. Which would tell you all you need to know about financial competence in Jersey.

AUDIO: Academic Propaganda Protecting US Financial Imperialism

Published by Anonymous (not verified) on Mon, 11/06/2018 - 7:30pm in

Australia’s Renegade Economists radio show interviews US economist Michael Hudson (June 7, 2018). Prof Michael Hudson joins to review his critique of US financial imperialism in light of recent events. From the World Bank, IMF through to deep state strategy, Hudson is the best in the business at tying the economic pressures in our lives to the geo-political forces at work.